Stakeholders forcast gloomy outlook as financial sector contributes 71% to turnover

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The financial services industry dominated in volume terms at the end of last week’s transactions on the floor of the Nigerian Exchange Limited (NGX).
It led the activity chart with 1.6 billion shares valued at N15.7 billion in 14,851 deals; thus contributing 71.82 per cent to the total equity turnover volume and value respectively. The oil and gas industry followed with 157.2 million shares worth N1.3 billion in 3,549 deals.
The consumer goods industry, with a turnover of 101.5 million shares worth N1.9 billion in 3,944 deals.
Trading in the top three equities namely United Bank for Africa Plc, FCMB Group Plc and NPF Microfinance Bank Plc (measured by volume) accounted for 696.2 million shares worth N4 billion in 2,398 deals, contributing 31.70% to the total equity turnover volume.
Consequently, a total turnover of 2.2 billion shares worth N45.9 billion was recorded in 31,655 deals by investors on the floor of the exchange, lower than a total of 2.6 billion units, valued at N46.6 billion that changed hands in 35,122 deals during the preceding week.
Analysts predicted gloomy outlook, blame weak economic recovery and absence of policy implementation that would boost investors’ confidence and sustain recovery at the moment.
Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion said: “We expect the mixed sentiments and trend to continue until fundamental news and policy implementation guidelines of the government become clearer to give market direction.
“Portfolio realignments will persist in the face of bearish divergence in market technicals, inspite of dividend payment and expected March year end audited accounts.

“We note that discerning investors have continued to target fundamentally sound companies and defensive stocks to protect their portfolios post-dividend adjustments. Investors should take advantage of price rally to take profit, while also looking at the trends and events across the globe.”

Codros Capital said: “We expect the choppy trading pattern that played out this week to persist in the week ahead as investors continue to cherry-pick stocks with fundamentals and, at the same time, remain cautious.

“Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”

Vetiva Dealings and Brokerage said:”Given the relatively lukewarm sentiment displayed this week (lastweek), we anticipate another week of mixed trading as investors maintain their cautious approach, and favour fundamentally sound stocks.”

A total of 4.5 million units of Exchange Traded Products (ETPs) valued at N57.6 million were traded in 116 deals compared to a total of 10,317 units valued at N4.2 million transacted in 62 deals during the preceding week.
Also, 125,410 units valued at bonds, worth N126.5 million were recorded in 35 deals compared to a total of 44,858 units valued at N44.174 million transacted in 24 deals.
On the price movement chart, the All-share index and market capitalisation appreciated by 0.2% to close the week at 55,930.97 and N30.455 trillion respectively.
Similarly, all other indices finished higher with the exception of NGX Premium, NGX AFR Div. Yield, NGX Lotus II, NGX Industrial Goods, NGX Growth and NGX Sovereign Bond which depreciated by 0.7 per cent, 0.06 per cent, 0.08 per cent, 1.31 per cent, 0.51 per cent, and 1.5 per cent respectively while the NGX ASeM index closed flat.
52 equities appreciated in price during the week lower than 66 equities in the previous week. 27 equities also depreciated in price higher than 23 in the previous week, while 77 equities remained unchanged, higher than 67 recorded in the previous week.