SAT, MARCH 13 2021-theG&BJournal-Although the market closed positive on two of the five trading days of the week, the gains proved insufficient in lifting the market back into the green as the local bourse suffered its sixth consecutive weekly loss.
A total turnover of 1.675 billion shares worth N23.541 billion in 21,732 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 2.092 billion shares valued at N29.744 billion that exchanged hands last week in 24,238 deals.
Specifically, the All-Share Index declined by 1.7% w/w to close at 38,648.48 points. Consequently, the YTD return dipped further into negative territory, settling at -4.0%. Activity levels were also weak, as volume and value traded declined by 22.6% w/w and 30.7% w/w, respectively. Notably, sell-offs in bellwether stocks UBA (-10.0%), MTNN (-7.0%), ZENITH (-5.4%) and GUARANTY (-0.9%) drove the weekly loss.
All other indices finished lower with the exception of NSE Mainboard, NSE Insurance, NSE ASeM, NSE MERI Growth, NSE Consumer Goods and NSE Oil/Gas Indices, which rose by 0.37%, 2.84%, 0.12%, 0.24%, 2.18 and 0.59% while the NSE Sovereign Bond Index closed flat.
Sectoral performance was broadly negative as the Industrial Goods index (+1.3%) emerged as the week’s sole gainer. The Banking (-7.6%) led the losers’ chart, followed by Consumer Goods (-4.3%), Insurance (-2.3%) and Oil and Gas (-1.6%) indices.
The Financial Services Industry (measured by volume) led the activity chart with 1.200 billion shares valued at N10.272 billion traded in 12,518 deals; thus contributing 71.64% and 43.64% to the total equity turnover volume and value respectively.
The Consumer Goods Industry followed with 110.564 million shares worth N3.577 billion in 3,234 deals. The third place was Industrial Goods Industry, with a turnover of 99.761 million shares worth N5.322 billion in 1,309 deals.
Trading in the top three equities namely United Bank for Africa Plc, FBN Holdings Plc and Zenith Bank Plc (measured by volume) accounted for 524.548 million shares worth N5.957 billion in 5,346 deals, contributing 31.32% and 25.30% to the total equity turnover volume and value respectively.
We expect the choppy theme that played out this week to persist in the week ahead as investors continue to cherry-pick dividend-paying stocks and, at the same time, exhibit reluctance in leaving gains in the market.
With uncertainties about the direction of yields in the FI market still bugging investors’ minds, the bears are likely to retain dominance in the market. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.
Meanwhile, Global stocks edged higher as investors flocked into cyclical and heavyweight tech stocks, following a short reprieve in rising U.S Treasury yields. Later in the week, investor sentiment was further strengthened by President Biden’s assent to the USD1.9trillion economic relief bill. In the U.S, the DJIA (+3.1%) and S&P (+2.5%) rallied on the back of lower-than-expected inflation data, which eased concerns about an impending end to the era of ultra-loose monetary policy and reactions to the stimulus package.
In Europe, the STOXX Europe (+3.3%) and FTSE 100 (+1.2%) were buoyed by dovish comments made by the ECB President, Lagarde, which helped soothe concerns about higher borrowing rates that will hamper economic recovery.
In Asia, Wall Street’s rally boosted the Nikkei 225 (+3.0%). In comparison, SSE (-1.4%) extended losses from the prior week as investors reacted to higher Covid-19 cases that affected a substantial number of financial-market executives. Emerging markets (MSCI EM: +2.5%) stocks also mirrored the upbeat mood across global equities consequent on the gains in India (+0.9%), while Frontier (MSCI FM: +0.1%) market stocks posted marginal gains, driven by increases in Kenya (+0.7%).
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