SAT, 05 NOV, 2022-theGBJournal| Bullish sentiments returned to the Nigerian equities market amid bouts of profit-taking activities. Accordingly, the All-Share Index advanced by 0.8% w/w to close at 44,269.18 points.
Similarly, all other indices finished higher with the exception of NGX-Main Board, NGX CG, NGX Banking, NGX Pension, NGX Insurance, NGX-AFR Bank Value, NGX MERI Value, NGX Consumer Goods, NGX Oil & Gas and NGX Sovereign Bond indices which depreciated by 0.44%, 0.27%, 1.87%, 0.44%, 1.35%, 0.79% 0.98% 2.32%, 5.37% and 1.36% respectively, while the NGX ASeM and NGX Growth indices closed flat.
Bargain hunting in DANGCEM (+8.8%) and BUACEMENT (+2.9%) spurred the positive outturn. Consequently, the MTD and YTD returns settled at +1.0% and +3.6%, respectively.
A total turnover of 1.410 billion shares worth N15.510 billion in 19,025 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 598.817 million shares valued at N14.234 billion that exchanged hands last week in 15,859 deals, according to NGX data.
Trading in the top three equities namely Access Holdings Plc, FTN Cocoa Processors Plc and Fidelity Bank Plc. (measured by volume) accounted for 800.622 million shares worth N3.373 billion in 2,051 deals, contributing 56.76% and 21.75% to the total equity turnover volume and value respectively.
Sectoral performance was largely bearish following losses in the Oil and Gas (-5.4%), Consumer Goods (-2.3%), Banking (-1.9%), and Insurance (-1.3%) indices. On the flip side, the Industrial Goods (+5.4%) index was the sole gainer of the week.
The Financial Services Industry (measured by volume) led the activity chart with 804.570 million shares valued at N6.300 billion traded in 9,922 deals; thus contributing 57.04% and 40.62% to the total equity turnover volume and value respectively.
The Agriculture Industry followed with 357.623 million shares worth N287.992 million in 560 deals. The third place was the Conglomerates Industry, with a turnover of 68.309 million shares worth N97.051 million in 530 deals.
Looking ahead, we expect investors to rebalance their portfolios based on an assessment of corporate earnings released for Q3-22. However, the increased FI yields may continue to constrain buying activities.
Consequently, we expect market performance to remain mixed in the week ahead as investors rotate their portfolios towards stocks with attractive dividend yields amid intermittent profit-taking activities.
Overall, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.
At the global markets, unlike in the prior week, negative sentiments dominated as investors digested the better-than-expected October payrolls report and the implication for the pace of future rate hikes from the Federal Reserve.
Accordingly, US stocks (DJIA: -2.6%; S&P 500: -4.6) posted losses on the back of disappointing Fed commentary that signaled rates could stay higher for longer to combat inflation.
European stocks (STOXX Europe: -0.3%; and FTSE 100: +2.0%) posted mixed performances as investors reacted to further rate hikes from the Bank of England amid renewed expectation over an imminent relaxation of China’s COVID-19 curbs.
Asian markets posted positive performances — the Japanese equities (Nikkei 225: +0.3%) and the SSE (+5.3%) closed higher on the expectation that Beijing will roll back its Covid-Zero policy. Elsewhere, the Emerging market (MSCI EM: +1.8%) closed positively, primarily driven by robust gains in China (+5.3%), while the Frontier market (MSCI FM: -1.5%) declined following losses in the Vietnamese (-2.9%) market.
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