SAT 05 FEB, 2022-theGBJournal- The Nigerian equities market mirrored the bullish trend across global stocks, as investors continued to cherry-pick stocks with attractive dividend yields ahead of 2021FY dividend declarations.
Thus, the All-Share Index rose by 2.3% w/w to close at 47,279.92 points. All other indices finished higher with the exception of NGX Insurance and NGX Consumer Goods indices, which depreciated by 1.93% and 0.81% while the NGX ASem, and NGX Sovereign bond indices closed flat.
NGX Exchange Group data shows that a total turnover of 1.785 billion shares worth N19.614 billion in 27,822 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 1.448 billion shares valued at N19,080 billion that exchanged hands last week in 22,557 deals.
Trading in the top three equities namely Fidelity Bank Plc, Transnational Corporation Of Nigeria Plc, Guaranty Trust Holding Company Plc, (measured by volume) accounted for 415.095 million shares worth N3.205 billion 3,556 deals, contributing 23.25% and 16.34% to the total equity turnover volume and value respectively.
Notably, bargain hunting in SEPLAT (+10.1%), PRESCO (+7.6%), GTCO (+7.2%), MTNN (+5.4%) and DANGCEM (+5.5%) drove the weekly gain. Consequently, the MTD and YTD returns printed +1.4% and 10.7%, respectively.
Activity levels were decent, as trading volume and value rose by 23.2% and 2.8% w/w, respectively. Performance across sectors was mixed, as the Insurance (-0.9%), Consumer Goods (-0.6%), and Oil and Gas (-0.2%) indices recorded losses while the Banking (+0.2%) index was the sole gainer. The Industrial Goods index closed flat.
The Financial Services Industry (measured by volume) led the activity chart with 1.094 billion shares valued at N10.506 billion traded in 13,580 deals; thus contributing 61.29% and 53.56% to the total equity turnover volume and value respectively.
The Conglomerates Industry followed with 144.172 million shares worth N253.262 million in 1,077 deals. The third place was The ICT Industry, with a turnover of 122.193 million shares worth N1.719 billion in 1,661 deals.
In the short term, we expect the bulls to continue to rotate their portfolio towards dividend-paying stocks ahead of 2021FY dividend declarations, even as institutional investors continue to search for clues on the direction of yields in the FI market. However, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.
Global stocks staged an impressive comeback from last week’s rout as investors’ sentiments were lifted by the positive corporate earnings released during the week, although concerns over Federal Reserve tightening persisted.
Accordingly, US stocks (DJIA +1.1%; and S&P 500: +1.0%) were poised for a weekly gain supported by strong earnings from heavyweight “FAANG” stocks which outweighed a rout in tech stocks.
European equities (STOXX Europe: +0.7% and FTSE 100: +0.8%) were on track for a weekly gain, as investors continued to digest hawkish comments from the European Central Bank (ECB) and Bank of England (BOE).
In Asian markets, the Japanese (Nikkei 225: +2.7%) market mirrored the trend on Wall Street buoyed by strong earnings reports and hopes for reduced border restrictions in Japan. However, the Chinese (SSE: 0.0%) traded in a lull following the observance of the Lunar New Year holiday in China.
Elsewhere, the Emerging market (MSCI EM: +1.6%) and Frontier market (MSCI FM: +1.9%) stocks closed higher following gains in South Korea (+3.3%) and Kuwait (+0.6%), respectively.
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