SAT, 28 MAY, 2022-theGBJournal| The NGX Exchange closed in the green territory despite profit-taking activities in heavyweights in the telecommunications and consumer goods sectors, as the All-Share Index advanced by 2.1% w/w to close at 54,085.30 points.
A total turnover of 1.840 billion shares worth N27.286 billion in 27,273 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 3.021 billion shares valued at N31.784 billion that exchanged hands last week in 29,153 deals, according to NGX Exchange data.
Trading in the top three equities namely Ecobank Transnational Incorporation, Jaiz Bank Plc and Access Holdings Plc (measured by volume) accounted for 640.650 million shares worth N4.825 billion in 2,098 deals, contributing 34.81% and 17.68% to the total equity turnover volume and value respectively.
The positive performance this week was buoyed by foreign investors’ renewed interest in AIRTELAFRI (+20.2%) which proved sufficient in offsetting losses in GUINNESS (-11.2%), NB (-10.0%), and MTNN (-4.8%). Consequently, the MTD and YTD returns for the index increased to +9.0% and +26.6%, respectively.
However, activity levels were weaker than in the prior week, as trading volume and value declined by 39.4% w/w and 14.5% w/w, respectively.
Performance across sectors in our coverage was broadly negative, following losses in the Insurance (-6.3%), Consumer Goods (-3.9%), Oil and Gas (-0.9%), Banking (-0.8%), and Industrial Goods (-0.7%) indices.
The Financial Services Industry (measured by volume) led the activity chart with 1.286 billion shares valued at N10.745 billion traded in 12,379 deals; thus contributing 69.90% and 39.37% to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 251.105 million shares worth 1.659 billion in 1,371 deals. The third place was The Consumer Goods Industry, with a turnover of 105.601 million shares worth N2.522 billion in 4,263 deals.
With the recent decision of the MPC to hike the MPR by 150bps, we expect negative sentiments to dominate market performance in the short term. Nonetheless, we think a short-term market correction will present opportunities for investors to make re-entry in stocks with sound fundamentals and attractive dividend yields.
Overall, we advise investors to take positions in only fundamentally justified stocks as the fragility of the macroeconomic environment remains a significant headwind for corporate earnings.
Meanwhile, Global stocks mounted a solid rebound this week as appetite for risk assets strengthened following an upbeat retailers’ earnings outlook in the US, and the less-hawkish minutes from the US Fed, which subdued fears over aggressive monetary policy tightening.
Accordingly, US (DJIA: +4.4%; S&P 500: +4.0%) stocks were on track to close higher as positive earnings reports from retailers and a rally in tech stocks buoyed sentiments.
European stock markets (STOXX Europe: +1.7%; and FTSE 100: +2.1%) were on course for a positive close buoyed by retail stocks, even as investors reacted positively to new fiscal stimulus measures in the UK.
Asian markets posted mixed performances, as the Nikkei 225 (+0.2%) closed higher as investors’ sentiments were lifted by the rally on Wall Street amid tourism sector recovery hopes in Japan. Similarly, the SSE (-0.5%) reversed two-weeks highs as growing concerns about tech earnings and economic slowdown dampened sentiments.
The Emerging (MSCI EM: -1.2%) and Frontier (MSCI FM: -0.3%) markets stocks declined following the downbeat mood in China (-0.5%) and Kuwait (-3.0%), respectively.
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