The Nigerian stock market lost ground following six weeks of gains due to a variety of risks, including weakening naira buying power and growing inflation exposure. According to market statistics, significant selloffs in bellwethers and mid to small-cap companies, particularly in Airtel Africa, Fidelity, and Zenith Bank, were the cause of the weekly loss of more than N280 billion.
After a strong profits performance in the fiscal year 2022, Airtel Africa, the top market mover on the Nigerian Exchange, had its share price decline by 6%. MTN Nigeria, its contemporary, is still strong, and analysts advise investors to maintain positions in the telecom sector.
Notwithstanding the local stock market’s collapse, some stockbrokers view the trend as sporadic and anticipate a return to new winning streaks as a result of a drop in yield in the fixed income market even as inflation continues to increase.
As a result, week over week, the Nigerian Exchange All-share index decreased 1.0% to 53,804.46 points. Moreover, the market cap dropped by 280.5 billion to 29.3 trillion while the year-to-date return dipped to 5.0%. Stockbrokers said that the average volume and value traded each week declined by 20.4% and 9.4%, respectively, to 150.4 million units and 4.2 billion, respectively.
By volume, BUAFOODS (50.5 million units), UBA (81.8 million units), and GTCO (87.5 million units) were the most actively traded equities; by value, BUAFOODS (3.8 billion), DANGCEM (2.8 billion), and GTCO (2.2 billion) were in the lead. According to market observers, most of the indexes performed well, with higher funding flows into the equities market and persistent purchasing impulses providing support.
This drive excludes the banking index, which saw profit-taking and caused it to fall by 1.34% week over week. LINKASSURE (+7.1%), CORNERST (+1.7%), CONOIL (+10.0%), and OANDO (+2.6%) all saw increases. CADBURY (+4.8%), HONYFLOUR (+3.3%), TRIPPLEG (+45.3%), and CUTIX (+2.4%) are behind buy interest.
Investor sentiment, measured by market breadth, improved to 0.1x from -0.3x in the prior week, as 34 stocks gained, 27 lost while 91 closed flat amidst rising inflation numbers, which printed 21.82% for January, and declining rates and yields in the fixed income market. TRIPPLEG (+45.3%), LIVINGTRUST (+16.2%), and CHAMS (+16.0%) led the top gainers while CWG (-17.3%), FIDELITY (-14.7%) and PHARMDEK (-10.0%) led the decliners.
The level of market trading activities was varied as we saw the total number of deals decrease by 14.8% week on week to 15,822 as stockbrokers recorded a 20.13% decline in trade volumes to 751.9 million units valued at N13 .21 billion, Meanwhile, the top-gaining securities for the week were CHAMS (+16%), CONOIL (+10%), and MRS (+8%), while the week’s losers were FIDELITYBNK (-15%), NGXGROUP (-9%), and TRANSCORP (-7%).
