Stock Market Value Falls Below N20trn
The value of the Nigerian equities declined below the N20 trillion mark last week to N19.627 trillion, following sustained profit taking in bellwether counters.
The market, which had declined by 1.30 per cent the previous week, posted another depreciation last week with the Nigerian Exchange (NGX) Limited All-Share Index falling by 2.56 per cent to close at 37,658.26, while market capitalisation shed N516 billion to close at N19.627 trillion.
The bears dictated proceedings in the local bourse in four of the five days while sell-offs in Airtel Africa Plc, Dangote Cement Plc, BUA Cement Plc and MTN Nigeria Plc pushed the market capitalisation below N20 trillion for the first time this year.
However, it is expected that the market would rebound this week as moderation in prices of bellwether stocks provides an opportunity to enter the market.
“We believe a “choppy theme” will be the overarching theme in the local bourse as investors continue to watch out for clues on the direction of yields in the fixed income (FI) market. Following the moderation in the share prices of bellwether stocks, we expect the bulls to make a re-entry in dividend-paying stocks ahead of first half (H1)-2021 dividend declarations, which intermittent profit-taking activities would match.
“However, we reiterate the need for positioning in only fundamentally sound stocks as the macroeconomic environment’s fragility remains a significant headwind for corporate earnings,” analysts at Cordros Securities said.
Also commenting, analysts at InvestData Consulting stated that technically, the NGX index action has formed a double zigzag and bottom that support an uptrend, but requires volume and a clear candlestick formation to confirm direction.
“Market recovery at this point may be powerful depending on the state of the expected numbers with possibility of maintaining what we saw in 2020 and the last Q1 corporate earnings. Should that happen, prices will respond to these earnings in the short or long run and as such improve your investment results and boost confidence,” they said.
Meanwhile, investors traded a total of 1.006 billion shares worth N10.330 billion in 17,165 deals compared with 981.147 million shares valued at N10.384 billion that exchanged hands in 15,001 deals the previous week.
The Financial Services Industry led the activity chart with 646.404 million shares valued at N5.199 billion traded in 8,996 deals, thus contributing 64.2 per cent and 50.3 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 108.587 million shares worth N2.257 billion in 3,213 deals, just as Conglomerates Industry occupied the third position with 80.257 million shares worth N179.134 million in 614 deals. Trading in the top three equities namely Zenith Bank Plc, Transcorp Hotels Plc and Access Bank Plc accounted for 207.341 million shares worth N2.510 billion in 2,774 deals.
A total of 33 equities appreciated in price last week lower than 38 in the previous week, while 37 depreciated in price higher than 25 equities in the previous week. Veritas Kapital Assurance Plc and Linkage Assurance Plc led the price gainers with 18.1 per cent apiece, trailed by Vitafoam Nigeria Plc with 17.7 per cent. Honeywell Flour Mills Plc chalked up 10.7 per cent.
Conversely, Consolidated Hallmark Insurance Plc led the price losers with 13.4 per cent, followed by Royal Exchange Plc with 12.5 per cent. Airtel Africa Plc went down by 10 per cent, while Juli Plc shed 9.5 per cent.