Market Declines Further as Investors Ignore Companies’ Results

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Goddy Egene

The stock market declined further last week as investors ignored the corporate results and dividends being declared by companies.
The market, which lost N1.364 trillion in month of February, shed N245 billion last week while the benchmark index declined by 1.18 per cent to close at 39,331.61.

The continuing bear run is persisting despite the inflow of corporate results by companies. It was expected that the declaration of dividends by companies would stop the bears.

Analysts at Cordros Securities had said they expected the NSE floor to be flooded with corporate earnings as more companies publish their audited FY 2020 numbers, accompanied by dividend declarations.
“We believe this should provide respite for market performance. However, we expect intermittent profit-taking activities to continue due to lingering concerns about yield elevation in the FI market.

As a result, we think the local bourse will likely exhibit a zig-zag pattern. “Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings,” analysts had said.
In spite the decline, the volume and value of trading rose last week as investors traded 2.092 billion shares worth N29.744 billion in 24,238 deals compared with a total of 1.930 billion shares valued at N20.656 billion that exchanged hands week in 24,687 deals the previous week.

But the Financial Services Industry remained the led the activity chart with 1.633 billion shares valued at N10.727 billion traded in 13,269 deals, thus contributing 78.06 per cent and 36.06 per cent to the total equity turnover volume and value respectively.
The Consumer Goods Industry followed with 92.009 million shares worth N4.521 billion in 4,168 deals, while the third place was occupied by Oil & Gas Industry with a turnover of 91.340 million shares worth N10.527 billion in 1,471 deals.
Trading in the top three equities namely Wema Bank Plc, Axamansard Insurance Plc and Zenith Bank Plc accounted for 903.561 million shares worth N5.564 billion in 4,017 deals.

The price movement chart showed that 14 equities appreciated in price during the week, lower than 20 equities in the previous week, while 71 equities depreciated in price, lower than 43 equities in the previous week.
Morison Industries Plc led the price gainers with 20 per cent, trailed by Skyway Aviation Handling Company Plc with 9.5 per cent. Unity Bank Plc appreciated by 8.9 per cent, just as Beta Glass Plc went up by 8.0 per cent.

LASACO Assurance Plc garnered 5.6 per cent, just as BUA Cement Plc, African Prudential Plc and University Press Plc garnered 3.8 per cent and 3.4 per cent in that order. Learn Africa Plc and CAP Plc gained 2.8 per cent and 2.5 per cent respectively.

Conversely, Champion Breweries Plc led the decliners with 33.3 per cent, followed by Japaul Gold & Ventures Plc with 28.9 per cent.
Ardova Plc shed 25.2 per cent, while Oando Plc and NASCON Allied Industries Plc went down by 23.1 per cent and 19 per cent in that order.
Other top price losers included: Associated Bus Company Plc (17.6 per cent); Cutix Plc 14 per cent); Sterling Bank Plc (14.0 per cent); Wema Bank Plc (12.7 per cent); Mutual Benefits Assurance Plc (12.5 per cent).

The Chief Executive Officer of the NSE, Mr. Oscar Onyema, recently expressed optimism that the market would record another impressive performance in 2021, saying the exchange would consolidate on the benefits of demutualisation.
Speaking during the virtual presentation of the 2020 market recap and 2021outlook, Onyema said the year has started on a positive note as the ASI has already returned 1.72 per cent after nine trading sessions.
“We expect the marginal reopening of businesses, normalisation of the economy and revenue-diversification drive of the Nigerian government to elicit positive sentiments throughout the year,” he added.

According to him, as the NSE transitions to a demutualised exchange group, new appointments were recently announced, which he said would support the NSE’s vision to be Africa’s preferred exchange hub.
“We look forward to consolidating on the benefits of demutualisation in the coming year. We intend to aggressively pursue cutting-edge products and services, access new markets and deliver better value to our valued stakeholders,” Onyema said.