SAT 30 OCT, 2021-theGBJournal- The NGX All-Share Index and Market Capitalization appreciated by 0.66% to close the week at 42,038.60 and N21.938 trillion respectively.
All other indices finished higher with the exception of NGX CG and NGX Meri Value indices which depreciated by 0.04% and 2.20% respectively, while the NGX ASeM and NGX Growth Indices closed flat.
It was the seventh consecutive of week of bullish run as investors flocked into bellwether stocks following broadly impressive quarterly earnings release. Notably, investors’ buying interest in GUINNESS (+23.1%), TOTAL (+17.5%), OKOMUOIL (+7.7%), NB (+3.0%) AIRTELAFRI (+1.3%), and MTNN (+0.9%) drove the benchmark index higher.
Consequently, the MTD and YTD return increased to +4.5% and +4.4%, respectively. Likewise, the activity levels mirrored the upbeat performance, as trading volumes and value grew by 83.8% w/w and 80.8% w/w, respectively. Across our sectoral coverage, the Insurance (+5.3%), Oil and Gas (+4.0%), Banking (+2.4%), Consumer Goods (+1.5%) and Industrial Goods (+0.5%) indices all closed positive.
The Financial Services Industry (measured by volume) led the activity chart with 1.600 billion shares valued at N15.608 billion traded in 14,065 deals; thus contributing 53.33% and 45.18% to the total equity turnover volume and value respectively.
The Oil and Gas Industry followed with 845.699 million shares worth N11.725 billion in 1,706 deals. The third place was Conglomerates Industry, with a turnover of 220.120 million shares worth N335.235 million in 1,238 deals.
In the coming week, we expect positive reaction to the flurry of earnings released this week as investors rotate their portfolio towards dividend-paying stocks ahead of 2021FY dividend declarations.
However, we expect profit-taking activities later in the week as the bears are likely to cash out on the gains across counters. Notwithstanding, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.
Trading in the top three equities namely Eterna Plc, FBN Holdings Plc, and Transnational Corporation Of Nigeria Plc (measured by volume) accounted for 1.731 billion shares worth N19.681 billion in 4,207 deals, contributing 57.66% and 56.97% to the total equity turnover volume and value respectively.
Positive sentiments dominated global equities after upbeat earnings reports from companies in US and Europe helped investors overlook a mixed batch of economic data. Accordingly, US (DJIA; +0.1% and S&P; +1.1%) were set to close the week positively as investors reacted positively to US President Joe Biden’s recently revealed USD1.75 trillion (1.5 trillion euro) spending package and solid Q3 earnings delivered by tech companies.
Likewise, European stocks (STOXX Europe: +0.4% and FTSE 100: +0.4%) were on course to close higher despite concerns about supply-chain disruptions, as investors digested corporate earnings and the ECB interest rate decisions.
On the other hand, the Asian market posted mixed performances as the SSE (-1.0%) closed lower following concerns over China’s slowing economy and its possible impact on corporate earnings. Elsewhere the Japanese (Nikkei 225: +0.3%) closed the week in the green as investors reacted positively to property group China Evergrande decision to make an overdue interest payment ahead of a Friday deadline.
On the other hand, the Emerging (MSCI EM: -1.3%) declined following losses in China (-1.0%), while the Frontier (MSCI FM: +1.8%) market posted gains following bullish sentiments in Kuwait (+1.9%).
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