SAT, 03 OCT, 2020-theGBJournal-In sharp contrast to the record sell-offs across global markets, Nigerian equities recorded their best weekly performance in four months, crossing 26,000 points for the first time since March 2020.
Amidst a sharp drop in fixed income yields following further monetary easing by the MPC, the stock market recorded a significant increase in activity with total volumes and value traded surging by 46.3% and 68.9% w/w, respectively.
Notably, investors interest in large caps NB (+25.1%), MTNN (+3.3%) and DANGCEM (+3.0%) drove the benchmark ASI 2.9% higher, w/w, to 26,319.47 points. The MTD and YTD returns for the index currently stand at 3.9% and -1.9% respectively. Accordingly, the Consumer Goods (+6.0%) index topped the sectoral charts, followed by the Banking (+3.6%), Industrial Goods (+2.4%), Oil & Gas (+1.2%) and Insurance (+1.1%) indices.
Trading in the top three equities namely Zenith Bank Plc, Sterling Bank Plc and United Bank for Africa Plc. (measured by volume) accounted for 815.646 million shares worth N7.311 billion in 4,461 deals, contributing 53.22% and 43.26% to the total equity turnover volume and value respectively.
Overall, a total turnover of 1.532 billion shares worth N16.901 billion in 17,882 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 1.567 billion shares valued at N20.559 billion that exchanged hands last week in 18,396 deals.
Analysts at Cordros Research expect the market might continue to benefit as domestic investors seek alpha-yielding opportunities in the face of increasingly negative real returns in the fixed income market. However, we advise investors to trade in only fundamentally justified stocks as the weak macro environment remains a significant headwind for listed companies.
Global markets
Meanwhile, Global equity markets were mixed as investors moved into the shares of beaten-down sectors on the heels of a sharp stock market sell-off the week before. However, stocks tumbled on Friday after President Donald Trump tested positive for COVID-19. Consequently, US (DJIA: +2.4%; S&P: +2.5%) stocks were up at the time of writing, while European (STOXX Europe: +1.1%; FTSE 100: -0.1%) shares were mixed.
In Asia, Japanese (Nikkei 225: -0.8%) shares closed lower, as cautious traders watched the US Presidential debate, Chinese (SSE: 0.0%) shares closed flat in the holiday-shortened week as losses in real estate and materials stocks outweighed optimism from upbeat factory activity surveys. In Emerging markets (MSCI EM: +2.4%), the benchmark index was up following a rise in South Korea (+2.2%). Conversely, Frontier market (MSCI FM: -1.1%) stocks were on track to end the week lower as Kuwaiti stocks plunged 3.2% following the death of the ruling Emir.
Twitter-@theGBJournal|email: info@govandbusinessjournal.com.ng
