SAT 06 NOV, 2021- theGBJournal- A total turnover of 1.428 billion shares worth N12.373 billion in 23,987 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 3.001 billion shares valued at N34.547 billion that exchanged hands last week in 25,932 deals.
Trading in the top three equities namely FBN Holdings Plc, Sterling Bank Plc and United Bank for Africa Plc (measured by volume) accounted for 402.924 million shares worth N3.063 billion in 3,208 deals, contributing 28.22% and 24.76% to the total equity turnover volume and value respectively.
The local bourse could not consolidate the gains recorded in the prior week as profit-taking dominated activities this week. We observed investors took advantage of the gains recorded over the past month in booking profit on bellwether stocks.
Accordingly, the NGX All-Share Index shed 0.1% to close at 42,014.50 points. Notably, profit-taking in UNILEVER (-14.4%), WAPCO (-5.6%), ETI (-5.1%) and FLOURMILL (-2.7%) drove the weekly loss. Consequently, the MTD and YTD return moderated to -0.1% and +4.3%, respectively. Activity levels mirrored the market’s broad-gauge decline, as trading volumes and value declined by 52.4% w/w and 64.2% w/w, respectively.
All other indices finished lower with the exception of NGX Main Board, NGX Insurance, NGX MERI Growth, NGX Lotus II and NGX Industrial Goods indices which appreciated by 0.32%, 0.99%, 0.09%, 0.15% and 0.88% respectively, while the NGX ASeM Index closed flat.
(Analysing by sectors, the Banking (-1.7%), Oil and Gas (-1.6%), and Consumer Goods (-0.7%) indices declined. On the flip side, the Insurance (+1.0%) and Industrial Goods (+0.9%) indices recorded gains.
Looking ahead, we expect investors to rebalance their portfolios based on an assessment of corporate earnings released for Q3-21. As a result, we expect market performance to remain mixed in the week ahead as investors rotate their portfolios towards dividend-paying stocks amid intermittent profit-taking activities. Overall, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.
Global stocks hovered around the record levels attained in the prior week as upbeat third-quarter earnings in US and Europe alongside dovish comments by the US Federal Reserve and the Bank of England buoyed investors’ sentiment. Furthermore, a better-than-expected US jobs data released later in the week added to overall optimism about the global economic recovery.
Accordingly, US (DJIA; +0.9% and S&P; +1.6%) were on course to end the week higher as reassurances given by Federal Reserve Chairman calmed investors’ nerves about the pace of interest rate hikes. In Europe, the STOXX Europe (+1.6%) and FTSE 100 (+0.6%) were set for weekly gains on the back of a strong batch of quarterly earnings and easing concerns around global monetary policy tightening.
Likewise, in Asia, the Nikkei 225: (+2.5%) rallied, mirroring Wall Street’s positive sentiments. On the other hand, the SSE (-1.6%) declined as growing concerns about Chinese developers’ debt defaults unsettled investors. Elsewhere, the Emerging (MSCI EM: +0.3%) closed higher consequent upon gains in Taiwan (+1.8%), which offset losses in China (-1.6%). While the Frontier (MSCI FM: -0.5%) market stocks declined following bearish sentiments in the Nigerian (-0.1%) market.
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