Nigerian equities rallied against early profit-taking trends to sustain their positive position at the weekend, bucking a global downtrend that saw most advanced and emerging global equities markets closing the week in the red.
Benchmark indices at the Nigerian stock market showed continuing positive sentiment for quoted equities, extending the rally that had seen several share prices doubling over this quarter. Average week-on-week return at the Nigerian equities market closed weekend at 1.6 per cent, equivalent to net capital gain of N188 billion.
The performance of the Nigerian equities counteracted the generally bearish sentiments that shaped prices in most advanced and emerging global equities market during the week. From London to New York and Tokyo, equities reeled under investors’ concerns over macroeconomic and political risks. In United Kingdom, the UK FTSE declined by 0.8 per cent.
In United States of America, the twin indices of S & P 500 and NASDAQ dropped by 0.3 per cent and 1.1 per cent respectively. Across the Europe, France’s CAC 40 Index declined by 1.0 per cent. Germany’s XETRA DAX Index slipped by 0.7 per cent. Russia’s RTS Index dropped by 2.1 per cent. In Asia, Japan’s Nikkei Index 225 dipped by 0.3 per cent. China’s SHANGHAI Composite Index dropped by 1.1 per cent while Brazil’s IBOVESPA Index dropped by 1.2 per cent.
African equities however showed a largely bullish outlook. Kenya’s Nairobi Stock Exchange (NSE) 20 Index rallied a week-on-week return of 2.1 per cent while Ghana Stock Exchange’s benchmark index showed a gain of 0.9 per cent. However, Egypt’s EGX 30 Index depreciated by 1.5 per cent.
The continuing rally at the Nigerian stock market highlighted considerable demand for Nigerian equities, most of which were believed to have been significantly undervalued over the past four years of continuous depreciation. In spite of visible profit-taking trend, which dominated transactions in the first two trading days of the week and continued underground throughout the week, increased demand boosted the overall market position.
The All Share Index (ASI)-the common value-based index that tracks share prices at the Nigerian Stock Exchange (NSE), rose from its week’s opening index of 33,276.68 points to close at 33,810.56 points, representing a week-on-week return of 1.6 per cent. Aggregate market value of all quoted equities at the NSE also rose from the week’s opening value of N11.504 trillion to close the week at N11.692 trillion, representing a capital gain of N188 billion.
The sustained rally pushed the average year-to-date return to 25.81 per cent, implying that most investors are almost with double-digit inflation-adjusted return. The National Bureau of Statistics (NBS) during the week released its latest inflation rate, showing that inflation rate from 17.2 per cent in April to 16.25 per cent in May.
While there were 38 gainers against 42 losers during the week, sectoral indices showed considerable rallies across the sectors. The NSE 30 Index, which tracks the 30 most capitalised stocks, posted a week-on-week return of 2.28 per cent. The NSE Banking Index outperformed all indices with 4.99 per cent. The NSE Insurance Index followed with 3.57 per cent while the NSE Consumer Goods Index inched up by 0.51 per cent. However, the NSE Oil and Gas Index slumped by 4.20 per cent on the back of profit-taking transactions while the NSE Industrial Goods Index slipped by 0.28 per cent.
May & Baker Nigeria, which recently announced a local vaccine production partnership with the Federal Government, continued to lead the rally with a gain of 60.6 per cent to close at N4.56 per share. Skye Bank followed with a gain of 41.5 per cent to close at 75 kobo. Cement Company of Northern Nigeria rose by 33.7 per cent to N8.85. Transnational Corporation of Nigeria appreciated by 22.4 per cent to N1.86. Ashaka Cement rose by 21.2 per cent to N14.07 per share. Unilever Nigeria rose by 20.9 per cent to N42.99. Okomu Oil Palm added 15.75 per cent to close higher at N70.18. Presco trailed with a gain of 15.73 per cent to close at N72.33. Unity Bank appreciated by 15.49 per cent to 82 kobo while Fidson Healthcare Plc rose by 15.38 per cent to N3.30 per share.
On the negative side, International Breweries led the losers with a drop of 19.17 per cent to close at N26.05. Forte Oil followed with a loss of 13.56 per cent to close at N55.58. Learn Africa dropped by 12.63 per cent to close at 83 kobo. Champion Breweries lost 8.55 per cent to close at N3.10. Custodian and Allied dipped by 8.45 per cent to N3.36 while Diamond Bank slipped by 7.64 per cent to close at N1.33 per share.
Investors staked a total of N32.04 billion on 2.737 billion shares in 32,217 deals during the week as against N29.18 billion staked on atotal of 3.100 billion shares in 33,677deals two weeks ago. The financial services industry led the activity chart with 2.189 billion shares valued at N21.792 billion traded in 18,832 deals; thus contributing 79.98 per cent and 68.01 per cent to the total equity turnover volume and value respectively. The conglomerates industry followed with 287.945 million shares worth N621.772 million in 2,031deals. The third place was occupied by Consumer Goods Industry with a turnover of 114.832 million shares worth N5.370 billion in 5,040 deals.
The three most active stocks were Access Bank Plc, Zenith International Bank Plc and Transnational Corporation of Nigeria Plc, which altogether accounted for 918.046 million shares worth N10.324 billion in 5,809 deals, contributing 33.53 per cent and 32.22 per cent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 16,300 units of Exchange Traded Products (ETPs) valued at N973,376 in three deals compared with a total of 40.317 million units valued at N178.841 million transacted in 12 deals in previous week.
In the debt segment, a total of 12,193 units of Federal Government Bonds valued at N12.440 million were traded in 14 deals compared with a total of 10,860 units valued at N10.196 million traded 10 deals in previous week.
Most analysts expected the market to continue trading between the mix of bargain-hunting and profit-taking, especially as investors await the second quarter and half year results of quoted companies.
“Whilst we remain optimistic that the upbeat market performance would persist in the near term as investor sentiment remains largely driven by strengthening macroeconomic fundamentals and foreign exchange management, we envisage some profit taking by investors on value stocks in the early trading sessions of next week,” Afrinvest Securities, a Lagos-based dealer at the NSE, stated.
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