Bullish sentiments persist at NGX as equities investors gain N236.6bn in a week

For another week, the domestic bourse maintained its bullish sentiment driven by strong buying interest and price appreciation in the large-mid cap stocks.

As a result, the All Share Index (ASI) closed northward by 0.9 per cent, week on week, to 49,316.29 basis points.

Last week, equities investors earned N236.6 billion as the market capitalisation appreciated in value by 0.9 per cent week on week to N26.86 trillion as the bulls and bears fight for market dominance in the week.

Specifically, bargain hunting in some banking stocks caused the Month-to+Date (MTD) and Year-to-Date (MTD) returns to increase to +3.5 per cent and +15.5 per cent, respectively. These bank’s share prices appreciated by 10.0 per cent, 2.4 per cent, 0.9 per cent, 0.8 per cent and 3.0 per cent, respectively.

Also, sectoral performance was broadly positive, as the Banking, Industrial Goods, Insurance and Oil and Gas indices closed higher by 2.8 per cent, 3.4 per cent, 0.5 per cent and 0.4 per cent, while the Consumer Goods index was the sole loser for the week having lost 0.2 per cent.

However, activity levels were lower this week as trading volume and value decreased by 34.1 per cent and 20.7 per cent Week-on-Week (w/w), respectively.

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A total of 814.089 million shares valued at N12.204 billion were traded during the week under review across 15,488 deals on the floor of The Exchange. This is lesser than the 1.225 billion units of shares valued at N15.243 billion that exchanged hands in the previous week in 19,305 deals.

Similar to the previous week, the Financial Services Industry led the activity chart in terms of volume of shares traded with 663.799 million shares valued at N5.517 billion traded in 7,240 deals; thereby contributing 81.54 per cent and 45.21 per cent to the total equity turnover volume and value respectively.

The ICT Industry followed with 44.358 million shares worth N4.493 million in 1,136 deals, while the Consumer Goods stood in third place with a turnover of 27.372 million shares worth N1.187 billion in 3,051 deals.

Trading in the top three equities by volume namely Sterling Bank, Access Corporation and Guaranty Trust Holdings accounted for 394.878 million shares worth N2.847 billion in 2,274 deals, contributing 48.51 per cent and 23.33 per cent to the total equity turnover volume and value respectively.

In the short term, analyst predict expansion in valuation multiples, as positioning by early birds in dividend-paying stocks ahead of 2022FY dividend declarations should outweigh profit-taking activities.

“Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings,” analysts at Cordros analysts advised.