Despite closing the month of August positively with N350 billion added to the market capitalisation, trading at the Nigerian Exchange Limited (NGX) opened the month of September on the red line as the benchmark index posted 0.6 per cent decline in the first week.
Bearish sentiments dominated the market last week, with the local bourse recording losses in three of the five trading sessions of the week, following sell-offs of large-cap stocks, consequently, the All-Share Index (ASI) shed 0.6 per cent Week-on-Week (WoW) to close at 39,261.01 basis points.
Accordingly, the Month-to-Date (MtD) and Year-to-Date (MtD) return settled at +0.1 per cent and -2.5 per cent, respectively.
However, activity levels during the week under review was strong, as trading volumes and value rose by 29.3 per cent and 5.0 per cent, respectively. Analysing by sectors indicated that the Oil and Gas, Consumer Goods, Industrial Goods, and Banking indices all closed in the red by -0.3 per cent, -1.3 per cent, -0.9 per cent and -0.6 per cent respectively. However, the Insurance index emerged as the sole gainer for the week with 0.8 per cent.
Meanwhile, the local bourse recorded improved performance in the month of August as investment went up by N350 billion as the market capitalisation went up to N20.434 trillion from N20.084 trillion it closed at end of July 2021.
The NGX ASI which opened the month of August at 38,547.08 basis points, appreciated by 1.74 per cent to closed the month at 39,219.61 basis points on August 31, 2021.
Capital market operators attributed the improved performance of the market to the strong first half, 2021 corporate earnings and improving macro-economic indices shown in the second quarter (Q2) GDP quarter-on-quarter growth of 5.01 per cent.
Looking ahead, analysts expect earnings from the big banks, specifically GTCO and United Bank for Africa to drive buying sentiments on the bourse, as the declaration of interim dividends may likely accompany the results.
“Overall, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings,” Cordros Capital said in its weekly report.
“Nevertheless, against the anticipated growth in real output, expectations of increased corporate profits and an expected moderation in fixed income yields, we expect the equities market climb northwards in H2 2021,” Cowry Asset Management Limited in its report titled ‘Review, Outlook and Investment Strategies for H2 2021’.
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