SAT 28 AUG, 2021-theGBJournal- In line with our expectations, cautious trading dominated the local bourse this week, as the NGX All-Share Index and Market Capitalization appreciated by just 0.01% to close the week at 39,485.65 and N20.573 trillion respectively.
All other indices finished lower with the exception of NGX Premium, NGX Banking, NGX Insurance, NGX AFR Div Yield, NGX Meri Value and NGX Oil & Gas indices which appreciated by 0.07%, 0.30%, 1.06%, 0.02%, 0.15%, and 0.08% respectively, while the NGX ASeM, NGX Growth and NGX Sovereign Bond Indices closed flat.
A total turnover of 1.026 billion shares worth N8.183 billion in 18,102 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 866.544 million shares valued at N12.257 billion that exchanged hands last week in 17,291 deals.
Trading in the top three equities namely Sovereign Trust Insurance Plc, Mutual Benefits Assurance Plc Transnational Corporation of Nigeria Plc (measured by volume) accounted for 247.735 million shares worth N114.399 million in 809 deals, contributing 24.15% and 1.40% to the total equity turnover volume and value respectively, according to MGX Exchange data.
Notwithstanding, we observed bargain hunting activities in FBNH (+1.4%), ACCESS (+1.1%), ZENITHBANK (+0.4%) and MTNN (+0.3%). Consequently, the MTD and YTD returns were flat at +2.4% and -2.0%, respectively.
Activity levels were mixed, as trading volumes rose by 16.7% w/w, while value traded declined by 33.5% w/w. Across sectors, the Insurance (+1.1%), Banking (+0.3%) and Oil and Gas (+0.1%) indices posted weekly gains while the Consumer Goods (-0.4%) and Industrial Goods (-0.2%) indices closed in the red.
The Financial Services Industry (measured by volume) led the activity chart with 567.225 million shares valued at N3.658 billion traded in 7,970 deals; thus contributing 55.30% and 44.70% to the total equity turnover volume and value respectively. The ICT Industry followed with 126.638 million shares worth N1.164 billion in 1,073 deals. The third place was Consumer Goods, with a turnover of 90.497 million shares worth N1.454 billion in 3,344 deals.
Considering the lull in the market this week, we believe earnings from the Big banks in the coming week will bring some breath of fresh air to the local bourse. Particularly, as the declaration of interim dividends will accompany the results.
Overall, we advise investors to seek trading opportunities in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.
Meanwhile, Global stocks flirted near record highs as investors kept their gaze on the highly-anticipated speech by the U.S Federal Reserve chief in Jackson Hole to gain clues about when the Fed will commence tapering stimulus.
In U.S, the DJIA (+0.3%) and S&P (+0.6%) were on course to end the week in the green despite the dent to sentiments induced by a deadly attack in Afghanistan and the Fed’s more hawkish tone on monetary policy.
Similarly, European (STOXX Europe: +0.4% and FTSE 100: +0.7%) equities reacted positively to U.S. health regulators full approval of a COVID-19 vaccine developed by Pfizer Inc and BioNTech SE amid stronger-than-expected economic data in Germany.
Likewise, Asia markets posted positive performances, as the Nikkei 225: (+2.3%) rallied on the back of the positive sentiments in Wall Street, amid the unprecedented spread of the delta variant. Likewise, the SSE: (+2.8%) rallied as a bounce in Chinese tech stocks lifted the market out of the bear territory.
Emerging markets (MSCI EM: +3.7%) and Frontier (MSCI FM: +0.6%) market stocks mirrored the bullish trend across global equities driven by gains in China (+2.8%) and Kuwait (+2.1%), respectively.
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