At the Nigerian Exchange Limited (NGX) last week, equities trading remained bullish despite profit-taking activities at the local bourse during week.
The bullish momentum persisted for the fifth consecutive week by 0.35 per cent Week-onWeek (WoW) on bearish divergence as the benchmark index stayed above the 59,000-index point to close at 59,206.63 basis points with gains in three out of five sessions ahead of the second quarter window dressing by portfolio managers.
Also the market capitalisation advanced by 0.35 per cent WoW to settle at N32.24 trillion on Friday as equity investors took profit worth N110.42 billion.
Consequently, the month-to-date and year-to-date returns for the index increased to +6.2 percent and +15.5 per cent, respectively.
Specifically, the equities market managed to record a marginal weekly gain as bargain hunting in BUA Cement, Dangote Cement and First Bank of Nigeria Holdings drove the ASI higher as these high cap stocks appreciated in share value over the week under review by 4.7 percent, 1.2 percent and 9.5 percent, respectively.
However, on the performance board for the week, according to data from the NGX, Skyway Aviation Handling Company (SAHCO), FTN Cocoa Processor and Chams Holding Company were the leading gainers having appreciated in share value by 44.53 percent, 40.74 percent and 35.71 percent, respectively; while Jaiz Bank, Secure Electronic Technology and C&I Leasing led the laggards’ chart for the week having recorded dipped in share value by 18.87 per cent, 17.19 percent and 13.78 percent, respectively.
Across the market sectors, the performance was widely bullish and was led by gains in the Insurance sector which closed the week by 3.22 percent and was trailed by the oil & gas sector, 2.97 per cent; industrial goods sector, 2.56 percent; banking sector, 1.13 per cent and consumer goods sector, 4.16 percent.
However, market activities were downbeat in lacklustre momentum on averagely low traded volumes and deals brokerage.
The total weekly deals slipped by 10.07 per cent WoW as the average traded volume reversed last week’s gains by 21.09 percent WoW, while the average weekly value plunged by 32.38 percent.
A total turnover of 3.369 billion shares worth N41.986 billion in 39,764 deals was traded by investors on the floor of the Exchange during the week under review. This is in contrast to a total of 4.276 billion shares valued at N62.176 billion that exchanged hands last week in 44,344 deals.
The Financial Services Industry, measured by volume, led the activity chart with 2.515 billion shares valued at N23.030 billion traded in 19,895 deals; thus contributing 83.86 percent and 66.06 percent to the total equity turnover volume and value respectively. The Oil and Gas Industry followed with 162.226 million shares worth N4.174 billion in 2,953 deals.
The third place was the Conglomerates Industry, with a turnover of 148.138 million shares worth N530.633 million in 1,962 deals.
Universal Insurance Plc, United Bank for Africa Plc and Guaranty Trust Holding Company Plc made the top three equities traded by volume. They accounted for 865.658 million shares worth N12.138 billion in 4,786 deals, contributing 25.70 per cent and 28.91 per cent to the total equity turnover volume and value respectively.
Looking ahead into the week, analyst believed their would be mixed sentiment as profit booking continued and as companies submit their Q2 financial results.
Analysts at Cowry Asset Management Limited anticipate the market to maintain its mix sentiment on continued profit taking as investors reshuffling their portfolio ahead of the Q2 window activities and reporting season.
“However, we continue to advise investors to target fundamentally sound companies and defensive stocks to protect their portfolios post-dividend adjustments,” they advised.
In the week ahead, analysts at Cordros expect investors to continue to hunt bargains in search of alpha, amid early positioning ahead of the HY earnings season. “However, we do not rule out the possibility of profit-taking activities. As a result, we think the local bourse will likely exhibit a choppy pattern. Therefore, we advise investors to take positions in only fundamentally justified stocks.”
Also, Ambrose Omordion, the Chief Research Officer at Investdata Consulting Ltd expect mixed sentiments to continue on profit taking and bearish divergence, as players target defensive stocks on improved investors sentiments to realign their portfolios, just as more policy pronouncements and appointments to give direction.
“Also, Q2 earnings reporting season draws closer to confirm the real state of the company performance and attract liquidity in the midst of markdown dates and expected March year end audited accounts.
“We note that discerning investors have continued to target fundamentally sound companies and defensive stocks to protect their portfolios. Any pullback at this point may add more strength to upside potentials. As such, investors should take advantage of price rally to take profit. Also looking at the trends and events across the globe and domestically, Ambrose noted.
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