FRI 12 NOV, 2021-theGBJournal- Despite recording losses on three of the five trading sessions, gains in telco heavyweights ensured the market closed in the green territory. Specifically, we observed strong buying interest in AIRTELAFRI (+12.8%) and MTNN (+8.8%) due to the euphoria that greeted the announcement of Payment Service Bank (PSB) licence approval by the Central Bank of Nigeria (CBN).
Consequently, the NGX All-Share index closed the week 3.0% higher at 43,253.01 points, with the MTD and YTD return settling at +2.9% and +7.4%, respectively. Activity levels were stronger than in the prior week, as trading volumes and value grew by 2.4% w/w and 69.0% w/w, respectively.
Trading in the top three equities namely FBN Holdings Plc, Sterling Bank Plc and UACN Plc (measured by volume) accounted for 519.011 million shares worth N4.057 billion in 1,787 deals, contributing 35.28% and 19.37% to the total equity turnover volume and value respectively.
Across sectors, the Banking (-1.3%), Insurance (-2.2%), Oil and Gas (-0.7%) indices declined while the Consumer Goods (+0.6%) index was the sole gainer. The Industrial Goods index closed flat.
In the week ahead, we expect investors to trade cautiously whilst taking positions in stocks with attractive dividend yields ahead of 2021FY dividend declarations. In addition, we believe the outcome of the bond auction scheduled to hold during the week will also shape market sentiments.
Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.
Global stocks posted mixed performances as investors sentiments were shaped by (1) a slew of impressive quarterly corporate earnings in the Eurozone and (2) strong inflation reading in the US later in the week, which fueled uncertainty over the path of the Fed’s monetary policy. In the US, the (DJIA; -1.1% and S&P; -1.0%) halted a streak of record closing highs as hotter-than-expected inflation readings dampened investors’ appetite for risk assets.
In Europe, the STOXX Europe (+0.5%) and FTSE 100 (+0.8%) rallied as solid corporate earnings from energy and media stocks helped counter inflation worries and interest rate hikes from the US Fed. In Asia, the Nikkei 225: (0.0%) ended the week directionless amid a dearth of positive triggers.
In contrast, the Chinese market (SSE: +1.4%) rallied on optimism that Beijing will ease regulatory curbs on real-estate companies to help stem debt defaults. Elsewhere, the Emerging (MSCI EM: +1.4%) closed higher consequent upon gains in China (+1.4%). While the Frontier (MSCI FM: -0.1%) market stocks declined following bearish sentiments in Morocco (-0.6%).
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