SAT, JULY 29 2023-theGBJournal |The Nigerian equities market closed in the green territory despite pressure from profit-taking activities during the week.
Eventually, the NGX All-Share Index and Market Capitalization appreciated by 0.02% to close the week at 65,056.39 and N35.403 trillion respectively.
All other indices finished higher with the exception of NGX Main Board, NGX CG, NGX Banking, NGX Insurance, NGX AFR. Bank Value, NGX AFR. Div. Yield, NGX MERI Value, NGX Consumer Goods and NGX Industrial Goods Indices which depreciated by 0.16%, 0.90% 2.21%, 1.60%, 2.20%, 1.78%, 0.65%, 2.36% and 0.31% respectively while the NGX ASeM and NGX Sovereign Bond Indices closed flat.
Bargain hunting in SEPLAT (+21.0%) and STANBIC (+10.9%) amid sell-offs of NB (-19.0%) and FBNH (-6.6%) stocks drove the weekly gain.
Based on the preceding, the Month-to-Date and Year-to-Date return advanced to +6.7% and 26.9%, respectively. On the other hand, activity levels wavered as the trading volume and value declined by 31.7% w/w and 62.0% w/w, respectively.
Sectoral performance was broadly negative following losses in the Consumer Goods (-2.4%), Banking (-2.2%), Insurance (-1.6%), and Industrial Goods (-0.3%) indices. On the flip side, the Oil and Gas (+1.4%) index was the sole gainer of the week.
The Financial Services Industry (measured by volume) led the activity chart with 1.936 billion shares valued at N27.704 billion traded in 20,839 deals; thus contributing 67.84% and 73.59% to the total equity turnover volume and value respectively.
The Oil and Gas Industry followed with 328.578 million shares worth N2.073 billion in 3,252 deals. The third place was the Conglomerates Industry, with a turnover of 156.660 million shares worth N692.091 million in 2,139 deals.
Trading in the top three equities namely FBN Holding Plc, Japaul Gold & Ventures Plc and United Bank for Africa Plc (measured by volume) accounted for 988.076 million shares worth N13.278 billion in 5,887 deals, contributing 34.62% and 35.27% to the total equity turnover volume and value respectively.
In the coming week, we expect a flurry of earnings releases on NGX’s floor as more companies publish their half-year numbers.
Against the preceding, we think positive earnings surprises and possible interim dividend declarations from companies would spur increased bargain-hunting activities on the bourse.
Nevertheless, we do not rule out the possibility of profit-taking activities on tickers that have experienced substantial appreciation.
In the medium term, we expect investors’ sentiments to be influenced by developments in the macroeconomic landscape and the movement of yields in the fixed-income market.
In the global equities market, sentiments remained broadly upbeat as investors continued to digest corporate earnings releases, economic data, and monetary policy decisions of major central banks.
As of the time of writing, US equities (DJIA: +0.7%; S&P 500: +0.9%) advanced as investors evaluated the better-than-expected GDP report and the Fed’s interest rate decision and outlook on the future path of rate hikes.
Elsewhere, European equities (STOXX Europe: +1.2%; FTSE 100: +0.5%) were supported by dovish comments from the European Central Bank (ECB) and a positive GDP report from France.
In the same vein, Asian equities (Nikkei 225: +1.4%; SSE: +3.5%) rallied on optimism about an end to US Federal Reserve tightening campaign and China’s pledge to support the real estate sector and revive the broader economy.
Finally, the Emerging (MSCI EM: +2.0%) and Frontier (MSCI FM: +0.5%) market indices posted gains, driven by the rally in China (+3.5%) and Vietnam (+1.4%), respectively.
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