The Nigerian Exchange (NGX) equities section fell by more than N256 billion last week as a result of profit-taking operations that spanned many trading sessions on the local market.
The stock market had strong selling rallies on three of the five trading days, resulting in a slowdown in key performance indicators following a seven-week bull run. Mid-week sale pressures on MTNN (-3.6%), FBNH (-22.1%), and ACCESSCORP (-20.3%) prompted the benchmark index to fall 0.8% to 62,569.73 points as activity levels fell.
Trading volume and value decreased by 46.6% and 56.4%, respectively, in contrast to the previous week’s results, according to data from the Lagos market. Profit-taking and sell-offs struck all types of equities spanning low, medium, and high-priced companies across all market sectors, causing the All-Share index to fall to 62,568.73 points.
This is despite the steady return of portfolio investors to the stocks market and dropping money market rates as evidenced in the most recent treasury bills auction, according to stock traders at Cowry Asset Management in an update.
According to market statistics, the year-to-date gain was 22.09%. The performance across sectors has been primarily mixed, with the industrial and oil & gas sectors emerging as the week’s biggest gainers, up 9.01% and 1.43%, respectively.
The banking sector was burned deep based on its weekly performance, declining by 14.32% due to sell-offs witnessed in ACCESSCORP (-20%), FBNH (-22%), ETI (-23%), and FIDELITY BANK (-25%).
Also, the insurance sector followed closely with a notable 11.53% decrease and then the consumer goods index closed by 2.29% week on week due to negative price movements.
Market activity was robust, evident in the surge in average traded volume and value for the week. Market data showed that the number of deals closed however dipped by 4.82% to reach 54,478, indicating a downswing in sentiment within the trading environment.
However, stockbrokers said in the update that the average traded volume experienced a substantial advancement of 87.40% week-on-week, totaling 9.83 billion units.
Additionally, the weekly average value expanded by 166.37% to N145.41 billion units, compared to N54.59 billion reported in the previous week. Leading the gainers’ chart; Ticker: COURTVILLE gained 33%, MORISON jumped up by 31%, and NASCON topped up its market valuation by 22%.
On the top loser chart: Ticker: CHAMPION was priced down by 32% WEMABANK lost 26%, and STERLINGNG saw a 25% negative price movement that drowned its market valuation
“..we expect the bearish sentiment to continue as the market heads for a correction in the short term, creating an attractive entry point for discerning equity investors seeking alpha to continue targeting the fundamentally sound defensive stocks to protect their portfolios as we enter the new reporting and earning seasons.
“Also, the profit-taking activities are expected to persist in the absence of a major catalyst to trigger positive sentiments. Meanwhile, we continue to advise investors on taking positions in stocks with sound fundamentals”, Cowry Asset Management told Investors.
“With the half-year earnings season on the horizon, we believe investors will look for clues on the sustainability of the decent corporate earnings released for Q1-23.
“However, we expect mixed market performance in the week ahead as bargain hunting on dividend-paying stocks will be matched by intermittent profit-taking activities.
“Overall, we reiterate the need for taking positions in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings”, Cordros Capital told Investors in its market update.
Analysing by sectors, the Banking index lost 14.3%, the Insurance index dipped by 11.5% and the Consumer Goods index dropped by 2.3%. Meanwhile, the Industrial Goods index rose 9.0% and Oil and Gas popped up by 1.4%. Overall, equities market capitalisation tanked by 0.75% week-on-week to reach N34.07 trillion as the market lost over N256.29 billion in 3 out of 5 sessions.
