By Habibat Aliu
Two bank stocks – Guaranty Trust Holding Company (GTCO) and Fidelity Bank Plc, drove activities in the financial service sector of the Nigerian Exchange Limited (NGX) last week.
With the development, the financial sector has maintained its dominance in volume terms with 501.3 million shares valued at N5 billion traded in 8,279 deals; thus contributing 53.4 per cent to the total equities turnover volume.
Following the banking sector in volume terms, last week, was the Information Communications Technology industry with 316.3 million units worth N8.7 billion in 1,249 deals. The oil and gas industry ranked third with a turnover of 28.2 million units worth N983.6 million in 846 deals.
In all, a total turnover of 938 million shares worth N16.7 billion was recorded in 15,700 deals by investors on the floor of the Exchange, higher than a total of 491.8 million units valued at N11.9 billion that changed hands in 14,350 deals on October 14, 2022.
The NGX All-share index and market capitalisation depreciated by 6.67 per cent to close the week at 44,396.73 and N24.182 trillion respectively.
Similarly, all other indices finished lower except NGX CG, NGX Banking, NGX Pension, NGX AFR Bank, NGX AFR Div Yield, NGX MERI Growth, NGX MERI Value, and NGX Industrial which appreciated by 0.17 per cent, 0.15 per cent, 0.58 per cent, 2.10 per cent, 2.45 per cent, 1.22 per cent, 3.12 per cent and 3.22 per cent respectively, while the NGX ASeM, NGX Growth, and NGX Sovereign bond indices closed flat.
Analysts attributed the persistent drop in indices to worsening macroeconomic challenges, urging both monetary and fiscal authorities to address issues constituting disincentive to investment in Nigeria to avert looming recession.
Cordros Securities said: “With the significant moderation in the prices of bellwether stocks this week, we expect savvy investors to take advantage of this and make a re-entry into stocks with sound fundamentals and attractive dividend yields.
“However, we do not rule out the possibility of continued profit-taking activities. As a result, we envisage a choppy trading pattern. Nonetheless, we 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: “As of today, Nigeria’s economic headwinds continue to worsen due to a mismatch of policies formulated by both the government and its economic managers.
“The forex market problem today is affecting investments and repatriation of profits by investors. We also note the flow of funds into the fixed income segment on the rate hike by the CBN.
“It is time for monetary and fiscal authorities to shake hands and address this issue to save the economy from a looming recession. This is because stock trading and investing depend on the underlying economic situation.
“However, there are sectoral stocks that are still seeing positive activities which investors should pay attention to, as the correction in the NGX index creates buying opportunities in stocks with high dividends and improved earnings growth.”
Furthermore, a total of 14,672 units of bonds valued at N14.3 million were traded in eight deals compared to 13,882 units valued at N13.9 million transacted in 12 deals during the preceding week.
On the price movement chart, 33 equities appreciated during the week, higher than 25 equities in the previous week. Twenty-nine equities depreciated higher than 24 in the previous week.
