The stock market segment of the Nigerian Exchange Limited (NGX) reversed prior week’s gains as the total market capitalization of listed equities experienced a decline of N400 billion week-on-week (WoW) to close at N36.886 trillion, trigged by profit-taking activities in Zenith Bank Plc, Guaranty Trust Holding Company (GTCO) Plc, Dangote Sugar Refinery Plc and MTN Nigeria Communications Plc (MTNN).
Consequently, the NGX All-Share index declined by 1.10 per cent WoW to close at 67,395.74 basis points.
The sectoral performance in the week unveiled a largely bearish outing.
The NGX Insurance index emerged as the lone gainer this week by 0.46 per cent week on week. On the contrary, the NGX Banking index was hardest hit this week as the index lost 3.24 per cent week on week.
The NGX Oil & Gas, NGX Consumer Goods and NGX Industrial Goods indices also exhibited signs of decline, albeit to a lesser extent, with losses of 2.02 per cent, 1.84 per cent and 0.28 per cent respectively.
However, market breadth for the week was negative as 32 equities appreciated in price, 53 equities depreciated in price, while 70 equities remained unchanged. Oando led the gainers table by 42.86 per cent to close at N11.00, per share. Chellarams followed with a gain of 32.76 per cent to close at N3.85, while CWG went up by 29.76 per cent to close to N7.50, per share.
On the other side, Associated Bus Company led the decliners table by 33.63 per cent to close at 75 kobo, per share. Omatek Ventures followed with a loss of 31.03 per cent to close at 40 kobo, while eTranzact International declined by 26.50 per cent to close at N7.35, per share.
Overall, a total turnover of 2.933 billion shares worth N47.449 billion in 44,654 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 2.644 billion shares valued at N45.450 billion that exchanged hands prior week in 44,189 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.955 billion shares valued at N26.384 billion traded in 21,707 deals; contributing 66.67 per cent and 55.61 per cent to the total equity turnover volume and value respectively. The Oil and Gas Industry followed with 281.356 million shares worth N5.307 billion in 4,423 deals, while the Conglomerates Industry traded a turnover of 280.586 million shares worth N1.763 billion in 3,079 deals.
However, capital market analysts have predicted cautious trading on the Nigerian stock market this week, in the absence of strong positive triggers to boost investors’ appetite for risky assets.
As the third quarter reporting season draws closer and investors take a bet on the back of recently published macroeconomic data, bearish momentum and pattern pervaded the domestic market this week with the benchmark index recording a 1.10 per cent week-on-week loss, last week.
This comes as FTSE Russell, a global index provider, opted to downgrade Nigeria’s equity index from ‘Frontier’ to ‘Unclassified’ market status on September 18, 2023 on the back of Nigeria’s ongoing foreign exchange (FX) crisis, which has posed formidable hurdles for international institutional investors seeking to repatriate their capital from the nation and this means that Nigerian stocks will be excluded from the FTSE Frontier Index Series, the FTSE Frontier 50 Index, and others.
In the new week, analysts at Cowry Assets Management Limited said “market sentiment is likely to be diverse as investors engage in bargain hunting ahead of the highly anticipated third-quarter earnings season which draws closer.
“This will be driven by reactions on the just published inflation data from the National Bureau of Statistics (NBS), which has remained elevated, potentially prompting further interest rate adjustments by the Central Bank of Nigeria (CBN) at its upcoming Monetary Policy Committee (MPC) meeting later this month. Meanwhile, we continue to advise investors on taking positions in stocks with sound fundamentals.”
Cordros Securities Limited noted that “we anticipate cautious trading on the bourse next week in the absence of strong positive triggers to boost investors’ appetite for risky assets. Overall, we reiterate that investors should seek trading opportunities in fundamentally sound stocks as the weak macroeconomic environment remains a significant headwind to corporate earnings.”While, Comercio Partners Limited stated that “looking ahead, we anticipate a continuation of similar market dynamics in the new trading session.”