SAT, 04 JUNE, 2022-theGBJournal| Local stocks closed in the bear territory following pressure from profit-taking activities during the week. Save for the last trading day of the week; the local bourse recorded losses in all of the week’s five trading sessions.
Accordingly, the All-Share Index shed 2.2% w/w to close at 52,908.24 points. Profit-taking witnessed in the shares of OKOMUOIL (-10.0%), PRESCO (-10.0%), NB (-8.1%), WAPCO (-4.1%), and MTNN (-3.0%) drove the weekly loss. Based on the preceding, the YTD return settled lower at +23.9%.
Subsequent to a block-divestment in UBN during the week, the total volume traded increased significantly to 28.74 billion (last week: 1.84 billion), valued at NGN209.06 billion.
Trading in the top three equities namely Union Bank of Nigeria Plc, Transnational Corporation Plc and FBN Holdings Plc (measured by volume) accounted for 27.841 million shares worth N193.488 billion in 1,872 deals, contributing 96.89% and 92.55% to the total equity turnover volume and value respectively.
Sectoral performance was broadly negative as losses in the Insurance (-5.5%), Industrial Goods (-3.7%), Consumer Goods (-2.5%), Banking (-0.7%), and Oil and Gas (-0.4%) indices reflected the overall negative sentiments in the market.
We believe a “choppy theme” will be the overarching theme in the local bourse as investors continue to play close attention to the direction of yields in the FI market. Following the moderation in the share prices of bellwether stocks this week, we see scope for the bulls to make a re-entry in stocks with attractive dividend yields.
However, we reiterate the need for positioning in only fundamentally sound stocks as the macroeconomic environment’s fragility remains a significant headwind for corporate earnings.
Meanwhile, global stocks posted mixed performances this week as investors traded cautiously ahead of U.S. nonfarm payroll data to determine how aggressively the Fed may continue to raise interest rates.
Accordingly, US (DJIA: -0.4%; S&P 500: -0.4%) stocks pared gains accumulated during the week as stronger-than-expected jobs report heightened expectations of a more hawkish Fed Reserve amid jitters caused by possible layoffs of Tesla workers.
European markets (STOXX Europe: -0.7%; and FTSE 100: -0.7%) were set for a weekly loss as hot inflation data reignited concerns about the pace of monetary tightening from central banks.
Elsewhere, Asian markets were broadly positive, as the Japanese (Nikkei 225:+3.7%) closed higher buoyed by the rebound on Wall Street during the week. Similarly, the SSE: (+2.1%) posted a weekly gain as investors bought the dip after selloffs triggered by a surge in Covid-19 caseloads and geopolitical tensions.
Emerging markets (MSCI EM: +1.8%) and Frontier (MSCI FM: +0.1%) market stocks closed on a positive note consequent upon gains in China (+2.1%) and Kuwait (+1.8%), respectively.
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