Local bourse appreciates marginally despite weak activity

Activity at the Nigerian Stock Exchange (NSE) last week was weak as the value and volume of trades fell by 14.4 per cent Week-on-Week (WoW) and 23 per cent w/w respectively.

The decline can be attributed to the ongoing civil unrest across the country, weighing on investors sentiment, as activity levels remained weak.

However, the local market closed the week with marginal growth despite sell-offs recorded midweek, thus bargain hunting in the last two trading sessions of the week pushed the All Share Index (ASI) to close at 28,697.06 basis points, representing 0.13 per cent w/w gain.

During the period also, market capitalisation gained N19.66 billion, closing at N14.999 trillion, from the previous weekend’s N14.979 trillion, representing 0.13 per cent value gain in investors’ portfolios.

Performance across the sectors was however bearish, except for the NSE Consumer Goods that closed 2.86 per cent higher, while the NSE Banking index’s led the decliners after losing 1.42 per cent, followed by the NSE Oil/Gas that declined by 0.69 per cent. The Insurance and Industrial goods indexes recorded 0.59 per cent and 0.06 per cent loss respectively.

Notably, investors’ interest in Nigerian Breweries, Dangote Cement, Stanbic IBTC Holdings and International Breweries NTBREW drove the benchmark index higher as they appreciated by 5.7 per cent, 0.7 per cent 2.3 per cent and 18.2 per cent respectively over the week under review. Thus the Month-to-Date (MtD) and Year-to-Date (YtD) return for the index grew to 6.9 per cent each.

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Despite the heat in the socio-political landscape triggered by the degeneration of the #ENDSARS protests, analysts at Cordros Capital said they do not expect a material dent to investors’ appetite for stocks.

“We reiterate that pent up system liquidity and the hunt for alpha-yielding opportunities in the face of increasingly negative real retu lorns in the fixed income market remain positive for stocks”.

They, therefore, advised investors to trade in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.

Ambrose Omordion, Chief Research Officer at Investdata Consulting Limited, however, noted that based on the strength of more expected corporate earnings and likely positive reaction to those already released to the local bourse, the current trend in the market are expected to continue on the inflow of funds and performance of the companies in the midst of profit-taking as normalcy return gradually with the lifting of curfew in many states.


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