Nigerian equities traded negative all through the week to close weekend with a net capital depreciation of N368 billion.
Benchmark indices for the Nigerian equities market showed negative average return of -1.66 per cent at the weekend, equivalent to net loss of N368 billion.
The decline in first week of February cut into the net capital gain of N1.13 trillion recorded last week, dropping the year-to-date average return to 3.57 per cent.
Aggregate market value of quoted equities at the Nigerian Stock Exchange (NSE) dropped to N21.819 trillion at the weekend as against N22.187 trillion recorded as opening value for the week.
The All Share Index (ASI) – the value-based common index that tracks all share prices at the Exchange – also declined from its week’s opening index of 42,412.66 points to close at 41,709.09 points at the weekend.
Total turnover stood at 2.767 billion shares worth N29.685 billion in 31,380 deals last week as against a total of 2.570 billion shares valued at N27.884 billion traded in 31,466 deals two weeks ago.
The financial services sector continued to lead activity chart with 1.924 billion shares valued at N20.344 billion in 15,160 deals, representing 69.54 per cent and 68.53 per cent of the total equity turnover volume and value. The conglomerates sector followed with 264.795 million shares worth N523.521 million in 1,528 deals. The consumer goods sector placed third with a turnover of 197.407 million shares worth N3.366 billion in 6,240 deals.
The three most active stocks were Union Bank of Nigeria Plc, First Bank Holding Plc and Transnational Corporation of Nigeria. The three most active stocks accounted for 859.867 million shares worth N4.250 billion in 2,459 deals, representing 31.08 per cent and 14.32 per cent of the total equity turnover volume and value.
Also, a total of 238,451 units of Exchange Traded Products (ETPs) valued at N1.799 billion were traded in 38 deals last week compared with a total of 262,345 units valued at N2.279 billion traded in 61 deals two weeks ago.
At the bond market, a total of 8,002 units of bonds valued at N9.171 million were traded in seven deals compared with a total of 20,510 units valued at N22.187 million traded in 17 deals two weeks ago.
Pricing trend analysis showed that there were 22 advancers against 60 decliners last week, a major dip from 41 advancers and 34 decliners recorded in the previous week. Linkage Assurance recorded the highest loss of 33.33 per cent to close at 60 kobo. Japaul Gold & Ventures dropped by 17.58 per cent to close at 75 kobo while AIICO Insurance declined by 13.57 per cent to close at N1.21 per share.
On the positive side, McNichols recorded the highest gain of 43.14 per cent to close at 73 kobo per share. Jaiz Bank followed with a gain of 10.77 per cent to close at 72 kobo per share while Eterna rose by 10.58 per cent to close at N5.75 per share.
At the NASD OTC Securities Exchange – the over-the-counter (OTC) market for trading in unlisted securities, the market also closed negative with the NASD Security Index (NSI)’s year to date return dropping by 2.21 per cent. The NSI dropped by 0.01 per cent to close weekend at 725.29 points against 725.39 points on Friday, January 29, 2021.
Also, NASD’s OTC market capitalisation closed weekend at N520.41 billion compared with N520.48 billion recorded as opening value for the week. There was a 81.53 per cent decrease in the total value traded during the week with a total of 1.112 million shares valued at N26.889 million compared with 1.272 million shares valued at N145.60 million recorded in the previous week.
Most analysts expected the equities market to remain tepid as investors weigh the direction of yields at the fixed-income market and the audited results of quoted companies.
“We expect the equities market rally witnessed in January to mellow in the months of February and March, despite the anticipated dividend payment announcements by corporates in the months, as share prices have risen to levels where the dividend yields appear to have been stretched. This is more so as the fixed income yields are beginning to rise,” Cowry Asset Management Limited stated.
According to analysts, the equities market may further trade southwards as risk-averse investors stay on the sidelines in anticipation of the audited full year results for last year and the announcements of their dividend payments.
Afrinvest Securities stated that trading would be a mix of bargain hunting and sustained profit-taking.
“The direction of yields in the fixed income market would also influence trades especially given the increase in marginal rates at the OMO auction this week,” Afrinvest Securities stated at the weeknd.
Analysts at Cordros Securities however said with the moderation in the prices last week, savvy investors may take advantage of the low prices and make re-entry ahead of the announcement of full-year 2020 results.
Analysts also cautioned that the recent hike in OMO rates by the Central Bank of Nigeria (CBN) will continue to stoke uncertainties on the direction of yields, keeping risk-averse investors on the side-lines.
“Thus, we expect a zig-zag market performance in the week ahead. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings,” Cordros Securities stated.
– The Nation
