NGX: Investors lose N1.7trn in 5 days as equities market hits 10 months low

Following about of profit-taking activities at the Nigerian Exchange Limited (NGX), last week, the benchmark index of the local bourse moved downhill by 6.67 per cent below the 45,000 psychological mark to 44,396.73 basis points for the first time since January 2022.

Equities investors, therefore, lost N1.73 trillion as the grip of the bears held the market capitalisation by 6.67 per cent, week on week (WoW) to N24.2 trillion.

Following the unimpressive performance on the back of waning investors’ sentiments, losses were recorded from the sell-pressure witnessed in tickers such as Airtel Africa, RTBriscoe, UACN, Nigerian Breweries and NEM Insurance leading 27 per cent, 18 per cent, 16 per cent, 13 per cent and 10 per cent, respectively.

Consequently, the Month-to-Date (MTD) loss increased to -9.4 per cent, while the Year-to-Date (YTD) return moderated significantly to +3.9 per cent.

Meanwhile, the sectorial performance closed the week in the mix as the NGX Industrial Goods Index led the gainers’ chart with 3.22 per cent appreciation, just like the previous week due to price appreciation in BUA Cement and followed by NGX Banking which also gained by 1.15 per cent week on week following strong buying interest in Fidelity Bank, Guaranty Trust Holding Company and Unity Bank.

Elsewhere, the level of trading activities last week closed strong as the total traded volume advanced 90.73 per cent WoW to 938.02 million units while the total weekly traded value also improved by 40.09 per cent week on week to N16.70 billion and then the total deals traded for the week climbed the ladder upwardly from the prior week to 15,700 from 14,350 deals last week.

Going into the new week, while profit-taking activities continue, analysts anticipate cautious trading to keep market muted as investors seek opportunity to hedge against the bear market and the inflationary environment in their search for value.

“However, we continue to advise investors to trade on companies’ stocks with sound fundamentals and a positive outlook amid the macro-dynamics which remains a headwind,” Cowry analysts said in their weekly report.

With the significant moderation in the prices of bellwether stocks last week, analysts expect savvy investors to take advantage of this and make a re-entry into stocks with sound fundamentals and attractive dividend yields.

“However, we do not rule out the possibility of continued profit-taking activities. As a result, we envisage a choppy trading pattern. Nonetheless, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro sto ry remains a significant headwind for corporate earnings,” Cordros Capital analysts said.

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