Investors in stocks lost about N633 billion over the course of two trading days as a result of the risk-off attitude that continues to drive a sharp decline in shareholdings at the local exchange. A move away from shopping for deals caused the market to close negative for an additional week. For some weeks now, the bearish trend has continued, causing the market capitalization of Nigerian bourses to decline.
The benchmark index dropped by 1.09% in the last week as a result of low trading volume and poor transaction value as investors sold off their stock holdings. This occurred in spite of leading banks’ impressive profit performance.
The market’s decline was ascribed to a combination of economic challenges and varied company profits, which were exacerbated by the build-up to the release of the March consumer price inflation data.
Overall, equity investors lost a total of N632.95 billion from the two sessions while the year to date return of the market printed at 36.83%.
Trading activity this week was downbeat with weak market breadth as evidenced in the total number of losers that outnumbered the gainers in the ratio 39:19.
Cowry Asset Management Limited said in its market update that investors continue portfolio rebalancing activities amidst the outcome of the Friday’s treasury bills auction.
Investors are rallying around attractive yields on short term borrowing instruments in the fixed income market. As a result, the weekly traded volume printed negative by 69.24% week on week to 1.13 billion units consummated in 21,921 deals and marking a 46.17% decline during the week.
In the same manner, the traded value for the week plummeted further by 50.51% week on week to N28.65 billion, according to data from the local bourse.
On the sectoral performance, it was a market-wide bearish performance as the NGX-Banking index led the laggards by 7.22% week on week driven by adverse price movements in ZENITH, GTCO, ACCESS and FBNH.
Trailing, were the NGX-Insurance (2.45%), NGX-Consumer Goods (1.33%), NGX-Oil & Gas (0.28%), and NGX Industrial Goods Index (0.23%) which got dragged by southward movement in FLOURMILL, SUNUASSUR, DANGSUGAR, ETERNA, WAPCO and ABBEYBDS respectively.
Best performing stocks for the week included MORISON, OANDO, TRANSCORP, DEAPCAP, and OMATEK as their share prices trended upward by 21%, 11%, 10%, 10%, and 9% in that order.
However, the worst performance stocks for the week are ACCESSCORP, UCAP, GTCO, FLOURMILL, and SUNUASSUR as their share prices plummeted by 15%, 14%, 14% and 13%.
At the end of closing session, equities market capitalisation went southward in the two sessions witnessed this week by 1.08% to close at N57.86 trillion. Banks Face Risks over 24hrs FX Positions Sell Down
Cowry Asset told investors via email update that the current trend of corrections is expected to persist as market fundamentals undergo changes amidst increasing volatility, portfolio rebalancing, and sector rotation by investors and fund managers.
Stock analysts think investors will closely monitor expected earnings numbers, published macroeconomic data and government policy direction for further guidance. “We continue to advise investors on taking positions in stocks with sound fundamentals”, Cowry Asset Management stated.
