Trading Value Falls as Investors Adopt Cautious Trading

Goddy Egene

Both volume and value of trading at the stock market fell last week as investors continued with profit-taking and cautious approach while waiting for the release of half year corporate results.
The volume of trading fell by 25 per cent from 1.348 billion shares worth N12.140 billion to 1.008 billion shares valued at N10.923 billion. Also the Nigerian Exchange (NGX) Limited All-Share Index (ASI) declined by 0.12 per cent to close at 37,947.18, while market capitalisation shed N24.5 billion to be at N19.771 trillion.

After declining the previous week, the bearish sentiments persisted last week for the second consecutive week, as investors booked profits on bellwether stocks. They were also cautious by investors as they await the release of Q2-21 earnings. However, while investors are eagerly waiting for the performance of companies, United Capital Plc on Wednesday announced its results for H1.

The investment banking firm defied the volatile financial markets to grow profit by 65 per cent, a development that raised investors’ hopes of seeing more improved results.

Specifically, United Capital Plc’s revenue rose to N6.853 billion, from N4.447 billion in the corresponding period of 2020. Total expenses printed at N3.113 billion, compared with N2.179 billion in 2020. Profit before tax jumped by 65 per cent to N3.740 billion, up from N2.268 billion, while profit after tax (PAT) rose from N1.913 billion to N3.142 billion in 2021.

Analysts added that apart from waiting for H1 results, some investors adopted cautious trading because of the Federal Government of Nigeria (FGN) Bond auction scheduled for this week.

“We believe the outcome of the bond auction will shape market sentiments. As a result, we expect investors to trade cautiously while taking positions in stocks with attractive dividend yields ahead of H1-21 dividend declarations, which intermittent profit-taking activities would match.

“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 said.

A look at the turnover activity showed that the Financial Services Industry led the activity chart with 732.418 million shares valued at N7.213billion traded in 9,131 deals, thus contributing 72.6 per cent and 66.04 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 52.931million shares worth N170.271million in 656 deals, while the third place was ICT Industry, with a turnover of 52.716million shares worth N1.806 billion in 701deals.

Trading in the top three equities namely Guaranty Trust Holding Company Plc, United Bank for Africa Plc and Zenith Bank Plc by accounted for 261.741million shares worth N5.813 billion in 3,498 deals, contributing 25.9 per cent and 53.2 per cent to the total equity turnover volume and value respectively.

Meanwhile, 29 equities appreciated in price during the week, lower than 44 the previous week, while 32 equities depreciated in price higher than 22 equities the previous week. FTN Cocoa Processors Plc led the price gainers with 20.6 per cent, trailed by NCR (Nigeria ) Plc with 20.5 per cent. Capital Hotel Plc and Sovereign Trust Insurance Plc garnered 10 per cent apiece among others.

Conversely, Ikeja Hotel Plc led the price losers with 18.8 per cent, trailed by Consolidated Hallmark Insurance Plc with 15.7 per cent. Unity Bank Plc went down by 8.4 per cent.

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