SAT 16 OCT, 2021-theGBJournal- The Nigerian equities market recorded its fifth consecutive weekly gain as strong buying interest in FBNH (+29.6%), OKOMUOIL (+8.2%) and GTCO (+3.5%) drove the All-Share Index 1.4% higher to close at 41,438.15 points. Consequently, the MTD and YTD return rose to +3.0% and +2.0%, respectively.
A total turnover of 2.838 billion shares worth N31.653 billion in 23,355 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 2.179 billion shares valued at N21.963 billion that exchanged hands last week in 22,438 deals, according to NGX data.
Trading in the top three equities namely FBN Holdings Plc, Guaranty Trust Holding Company Plc and Ecobank Transnational Incorporated Plc (measured by volume) accounted for 1.834 billion shares worth N23.372 billion in 5,981 deals, contributing 64.61% and 73.84% to the total equity turnover volume and value respectively.
The activity levels mirrored the upbeat performance, as trading volumes and value grew by 31.6% w/w and 45.1% w/w, respectively. Across our sectoral coverage, the Banking (+2.6%), Insurance (+1.6%), Industrial Goods (+1.0%), Oil and Gas (+0.6%) and Consumer Goods (+0.5%) indices all posted gains.
In the coming week, we expect investors’ sentiment will be shaped by Q3 earnings releases and the outcome of the bond auction scheduled to hold on Wednesday as they seek clarity on the movement of yields in the Fixed Income market. As a result, we envisage a mixed trading pattern due to bargain hunting activities in dividend-paying stocks amid intermittent profit-taking activities. Notwithstanding, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.
Like the prior week, global stocks edged higher following investors’ positive reactions to the stellar corporate earnings and economic reports in U.S, which temporarily overshadowed concerns over the higher inflation amid supply chain disruptions.
Accordingly, US (DJIA; +0.5% and S&P; +1.1%) were set for weekly gains as positive data on the labor market, and solid corporate earnings drove a rally in tech stocks. In Europe, the STOXX Europe (+2.1%) and FTSE 100 (+1.8%) were poised to end the week in green as strong earnings releases in US balanced stagflation worries. Likewise, In Asia, the Nikkei 225: (+3.6%) rallied following bullish sentiments on Wall Street.
On the other hand, the SSE (-0.6%) declined as investors weighed the impact of elevated inflation on the prospects of continued recovery in the global economy. Elsewhere, the Emerging (MSCI EM: +0.8%) and Frontier (MSCI FM: +1.2%) market stocks posted weekly gains following bullish sentiments in South Korean (+2.0%) and Nigerian (+1.4%) markets, respectively.
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