Local stock market bows to profit taking

Equities trading at the Nigerian Exchange Limited (NGX), last week was red, as local bourse closed bearish over profit booking.

Over the five-day trade, investors lost N123 billion from their investment, leaving the market capitalisation at N19.796 trillion as against an opening of N19.919 trillion.

Accordingly, the All-Share Index fell below the 38,000 psychological mark, as it declined by 0.6 per cent, Week-on-Week (WoW), to 37,994.19 basis points.

Thus, the Month-to-Date (MtD) and Year-to-Date (YtD) return settled at 0.2 per cent and -5.7 per cent, respectively.
Notably, selloffs in Airtel Africa and Dangote Sugar drove the weekly loss, having lost respective 10.0 per cent and 3.0 per cent from theit share value.

However, performance across sectors was broadly positive, as the Oil & Gas index topped the gainers’ chart with 6.5 per cent increase, trailed by the Banking Industrial Goods and Insurance indices. The Consumer Goods emerged as the week’s sole loser.
Activity levels at the local bourse over the week under review was however mixed as trading volume rose by 32.0 per cent WoW, while trading value declined by 14.2 per cent WoW.

Analysis indicated that a total turnover of 1.348 billion shares worth N12.140 billion in 21,581 deals were traded, in contrast to a total of 1.021 billion shares valued at N14.145 billion that exchanged hands in 17,565 deals over the penultimate week.
The Financial Services Industry led the activity chart with 892.212 million shares valued at N7.065 billion traded in 11,592 deals; thus contributing 66.20 no per cent and 58.20 per cent to the total equity turnover volume and value respectively.

The ICT Industry followed with 110.067 million shares worth N776.402 million in 744 deals. The third place was Conglomerates Industry, with a turnover of 100.008 million shares worth N216.504 million in 788 deals.

Fidelity Bank Plc, FBN Holdings Plc and Zenith Bank Plc were the top three equities traded measured by volume. They accounted for 310.779 million shares worth N3.166 billion in 3,289 deals, contributing 23.06 per cent and 26.08 per cent to the total equity turnover volume and value respectively.

Looking into the week ahead, Analysts at Cordros advised investors to take positions in only fundamentally justified stocks.

“With the moderation in the prices of bellwether stocks this week, we expect savvy investors to take advantage of this and make re-entry ahead of their H1-21 earnings announcement. However, we do not rule out the possibility of continued profit-taking activities. As a result, we think the local bourse will likely exhibit a zig-zag pattern.”

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