Stock Market Begins First Trading Week With N32bn Decline

The stock market of the Nigerian Exchange Limited (NGX) commenced March dropping by N32billion on investors’ profit-taking in large-mid capitalised stocks.

The domestic market had opened the week on a strong footing, the positive momentum lost steam as investors took a breather later in the week to digest corporate earnings released so far by listed companies.

The midweek selloffs undermined the market performance as the market capitalisation dropped by N32billion to close at N25.475 trillion from N25.507trillion the stock market opened for trading, while the NGX All-Share Index settled 0.13per cent lower to close at 47,268.61 basis points from 47,328.42 basis points.

Particularly, investors’ intense profit-taking activities witnessed in Lafarge Africa that depreciated by 8.8per cent to N24.00 per share, United Bank for Africa plc that declined by 5.2 per cent to close at N8.25 and Zenith Bank that dropped by 1.9 per cent to close at N26.45 drove the weekly stock market loss.

Consequently, the stock market Month-till-Date (MtD) and Year-till-Date (YTD) return for the index moderated to -0.31 per cent and +10.7per cent, respectively.

On sectors, the NGX Oil and Gas added 10.6 per cent to become the lone advancer while the Banking (-2.7per cent), NGX Consumer Goods (-1.7per cent), Industrial Goods (-0.7per cent), and Insurance (-0.2per cent) indices declined.

A total turnover of 1.374 billion shares worth N23.786 billion in 28,809 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 1.668 billion shares valued at N19.481 billion that exchanged hands last week in 25,979 deals.

The Exchange weekly report stated that the financial services Industry (measured by volume) led the activity chart with 889.542 million shares valued at N8.036 billion traded in 14,034 deals; thus contributing 64.74per cent and 33.78per cent to the total equity turnover volume and value respectively.

According to the report, the Conglomerates Industry followed with 131.154 million shares worth N199.272 million in 1,259 deals last week, while the third place was The ICT Industry, with a turnover of 89.777 million shares worth N10.593 billion in 2,119 deals.

“Trading in the top three equities namely FCMB Group Plc, Transnational Corporation of Nigeria Plc and Zenith Bank Plc (measured by volume) accounted for 416.676 million shares worth N2,989 billion in 3,321 deals, contributing 30.32per cent and 12.57per cent to the total equity turnover volume and value respectively,” the weekly report by NGX stated.

According to analysts at Cordros securities: “We expect investors to take advantage of the significant moderation in the share prices to make a re-entry in dividend-paying stocks in the week ahead.

“However, we envisage a zig-zag pattern as intermittent profit-taking activities will likely persist due to medium-term expectations on the direction of yields in the FI market.

“Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”