SAT, 14 MAY, 2022-theGBJournal | Despite the rout across the global equities market, the rally in the Nigerian equities market remained unscathed as intense bargain hunting activities in cyclical stocks pushed the All-Share Index higher by 4.3% w/w to close at 53,100.21 points.
Overall, 1.816 billion shares worth N27.194 billion in 36,286 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 1,598 billion shares valued at N19.603 billion that exchanged hands last week in 21,494 deals, according to NGX Exchange data.
Trading in the top three equities namely Transnational Corporation Plc, Guaranty Trust Holding Company Plc and Jaiz Bank Plc (measured by volume) accounted for 459,179 million shares worth N3.294 billion in 3,645 deals, contributing 25.28% and 12.11% to the total equity turnover volume and value respectively.
The Financial Services Industry (measured by volume) led the activity chart with 904.860 million shares valued at N8.498 billion traded in 12,883 deals; thus contributing 49.82% and 31.25% to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 263.830 million shares worth N540.313 million in 1,651 deals. The third place was The Consumer Goods Industry, with a turnover of 238.964 million shares worth N5.816 billion in 7,635 deals.
Notably, strong buying interest in INTBREW (+30.4%), OKOMUOIL (+26.5%), FLOURMILLS (+20.1%), MTNN (+15.0%), WAPCO (+14.2%), NB (+10.0%), and SEPLAT (+8.3%) drove the benchmark index higher, its fifth-consecutive weekly gain. Accordingly, the MTD and YTD returns for the index increased to +7.0% and +24.3%, respectively.
Likewise, activity level mirrored the upbeat performance, as volume traded rose by 13.6% w/w while value traded rose by 38.7% w/w. Performance across sectors was mixed, as the Oil and Gas (+6.9%), Consumer Goods (+5.4%) and Industrial Goods (+2.3%) indices recorded gains, while the Insurance (-1.9%) index declined. The Banking index closed flat.
In the near term, we think the bears are likely to book profit across most counters given the five-week bullish run in the market. Thus, we see more of a “choppy theme” as cautious trading takes center stage ahead of the MPC meeting scheduled later in the month. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.
Meanwhile, Risk-off sentiments reverberated across global markets as investors assessed the risk of a slowing global economy against the Federal Reserve’s aggressive monetary tightening moves. Accordingly, US (DJIA: -3.6%; S&P 500: -4.7%) stocks posted huge losses as investors reacted negatively to Federal Reserve officials comments on further tightening of monetary policy.
European markets (STOXX Europe: -0.4%; and FTSE 100: -0.9%) were set for a weekly loss as global growth and inflation concerns remained elevated in the region. Asian markets posted mixed performances, as the Japanese Nikkei 225: (-2.1%) closed lower mirroring selloffs on Wall Street.
Elsewhere, the SSE: (+2.8%) reversed weeks of losses as authorities ruled out the imposition of a lockdown in Beijing amid measures to contain the spread of the coronavirus. Emerging (MSCI EM: -4.2%) and Frontier (MSCI FM: -5.0%) market stocks mirrored the bearish trend across global stocks consequent upon losses in South Korea (-1.5%) and Kuwait (-7.3%), respectively.
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