Contrary to the significant buying activities witnessed in the previous weeks, the nation’s bourse was largely dominated by the bears last week, occasion by profit-taking activities in major highly capitalised stocks ahead of the Easter celebration.
The market opened for four trading days last week as the Federal Government declared April 7 (Good Friday) a public holiday to commemorate the 2023 Easter.
The influx of 2022 full-year numbers were not enough to impact the market positively as Airtel Africa price depreciation and profit booking in banking and consumer stocks dragged market indices.
Consequently, the All-share index and market capitalisation depreciated by 2.28 per cent to close the week at 52,994.13 and N28.869 trillion respectively.
Similarly, all other indices finished lower except NGX Insurance which appreciated by 2.19 per cent while the NGX ASeM and NGX Growth indices closed flat
In the same vein, the volume of shares traded declined significantly, as a total turnover of one billion shares worth N10 billion was recorded in 16,155 deals by investors on the floor of the Nigeria Exchange Limited (NGX), in contrast to a total of 2 billion units, valued at N17.5 billion that changed hands in 17,917 deals on March 31, 2023.
However, analysts said despite the mixed and bearish outlook of the market, some sectors have continued to show improved performance, judging from their recent numbers, as revealed by the strength of supply and demand.
They expressed optimism that the downtrend may not linger with the expected reaction to dividend news and corporate actions of companies that released their 2022 scorecards.
According to them, the earnings news and dividend payout by companies will trigger buying interests as investors rebalance their portfolios for the second quarter, whilst keeping an eye on the movement of yields in the FI market.
Analysts at Codros Capital said: “Massive sell-offs of AIRTELAFRI (-10 per cent) heaped greater pressure on the market, causing the benchmark index to plummet.
“Across sectors, the Banking (-one per cent), Consumer Goods (-0.6 per cent), and Oil & Gas (-0.1 per cent) indices declined while the Insurance (+2.2 per cent) index was the sole gainer of the week. On the other hand, the industrial Goods index closed flat.
“Heading into the second quarter, we expect investors to rebalance their portfolios based on an assessment of corporate earnings released for the 2022 full year and the movement of yields in the fixed income market.
” We continue to advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”
Investdata Consulting Limited, said: “We note that income investors will continue to target dividend-paying and defensive stocks to protect their portfolios post-dividend adjustments. Any pullback at this point may add more strength to upside potentials.
“As such, investors should take advantage of price correction. Also, look at the trends and events across the globe and domestically to guide your investment decision.”
Further breakdown of last week’s transactions showed that 42 equities appreciated during the week, lower than 48 equities in the previous week.
Twenty-two equities depreciated, higher than 18 equities in the previous week, while 98 equities remained unchanged, higher than 96 equities recorded in the previous week.
The financial services industry (measured by volume) led the activity chart with 630.3 million shares valued at N5.4 billion traded in 7,705 deals; thus contributing 59.83 per cent to the total equities turnover.
The conglomerates industry followed with 248 million shares worth N394 million in 812 deals.
The oil and gas industry ranked third with a turnover of 70.9 million shares worth N1.3 billion in 1,452 deals.
Trading in the top three equities namely Transnational Corporation Plc, United Bank for Africa Plc and Fidelity Bank Plc, (measured by volume) accounted for 498.5 million shares worth N2 billion in 1,862 deals, contributing 47.32 per cent to the total equity volume.
A total of 1,804 units of exchange-traded products valued at N755,567.4 were traded in 33 deals compared with a total of 15,217 units valued at N4.5 million transacted in 47 deals during the preceding week.
Also, 26,065 units of bonds, valued at N24.8 million were traded in 25 deals compared to a total of 8,506 units valued at N8.126 million transacted in 15 deals during the period.
