SAT 22 JAN, 2022-theGBJournal- The bullish momentum in the local bourse switched into a higher gear as the NGX All-Share Index rose above the 45,000 psychological mark to close at 45,957.35 points – the highest level since 19th January 2018 (45,092.83 points). Market Capitalization closed the week at N24.761 trillion.
Similarly, all other indices finished higher with the exception of NGX insurance index, which depreciated by 0.27%, while the NGX ASem, and NGX Sovereign bond indices closed flat.
A total turnover of 1.858 billion shares worth N47.486 billion in 20,861 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 1.600 billion shares valued at N32.716 billion that exchanged hands last week in 22,607 deals, according to data by NGX Exchange Limited (NGX).
Trading in the top three equities namely Computer Warehouse Group Plc, Transnational Corporation of Nigeria Plc, FBN Holdings Plc (measured by volume) accounted for 810.748 million shares worth N2.080 billion in 1,499 deals, contributing 43.65% and 4.38% to the total equity turnover volume and value respectively.
Pertinently, foreign investors’ demand for AIRTELAFRI (+10.0%) and bargain hunting in SEPLAT (+9.4%), DANGCEM (+5.5%), BUACEMENT (+4.2%), NB (+4.4%), DANGSUGAR (+4.4%) and GTCO (+2.4%) drove the benchmark index 3.4% higher. Consequently, the YTD gains surged to +7.6%.
Activity levels were stronger than in the prior week, as trading volumes and value rose by 18.0% w/w and 45.7% w/w, respectively. Save for the Insurance (-0.3%) index that declined, the Oil and Gas (+5.2%), Industrial Goods (+4.4%), Banking (+1.7%), and Consumer Goods (+1.0%) indices closed positive.
The Financial Service Industry (measured by volume) led the activity chart with 815.363 million shares valued at N7.066 billion traded in 10,736 deals; thus contributing 43.89% and 14.88% to the total equity turnover volume and value respectively. The ICT Industry followed with 596.575 million shares worth N845.020 million in 1,028 deals. The third place was The Conglomerates Industry, with a turnover of 161.347 million shares worth N191.189 million in 983 deals.
In the week ahead, we believe investors will be focused on the outcome of the MPC meeting to gain further clarity on the movement of yields in the FI market. Consequently, we expect a “choppy theme” as cautious trading will likely dominate the market. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.
Like the prior week, global stocks faltered as weak corporate earnings and the prospect of monetary policy tightening by global central banks dented risk appetite. Accordingly, the US (DJIA: -3.3%; S&P: -3.9%) suffered huge losses as weak results from Goldman Sachs weighed on financial stocks even as the selloffs in tech stocks persisted.
In Europe, the STOXX Europe (+0.5%) and FTSE 100 (+0.6%) were on course to close the week in green as investors digested a slew of earnings announcements and economic data from the region.
In Asia, the Nikkei 225 (-2.1%) settled lower as sentiments were dampened by selloffs on Wall Street and a widening of the COVID-19 quasi-state of emergency to more Japanese prefectures. Conversely, the SSE (0.0%) ended the week unchanged amid a dearth of positive triggers.
Emerging (MSCI EM: -0.1%) and Frontier (MSCI FM: -1.9%) market stocks mirrored the downtrend in global equities consequent upon losses in South Korea (-3.0%) and Kuwait (-0.4%), markets respectively.
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