Although the stock market closed positive twice, last week, the gains were not enough to push the indices as the market suffered its sixth consecutive weekly loss.
Consequently, the Nigerian stock Exchange (NSE) All-Share Index and market capitalisation depreciated by 1.74 per cent to close the week at 38,648.48 and N20.221 trillion.
Similarly, all other indices finished lower except NSE Mainboard, NSE Insurance, NSE ASeM, NSE MERI Growth, NSE Consumer Goods and NSE Oil/Gas Indices, which rose by 0.37 per cent, 2.84 per cent, 0.12 per cent, 0.24 per cent, 2.18 and 0.59 per cent while the NSE Sovereign Bond Index closed flat.
Analysts attributed last week’s sell-off to profit-taking in stocks that had rallied significantly before the beginning of the earnings season.
They argued that sentiment is expected to remain bearish in the near term with investors leaning towards the fixed income space. However, they urged investors to increase their stake in blue-chips, noting that downturn presents attractive entry opportunities in the equities market.
The Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion, said dividend-paying stocks, which suffered year-to-date and 52-week slide of 20 per cent and above during these selloffs are becoming attractive to consider for different investment objectives.
“Invesdata still believes that the recent rise in treasury bills and bonds yields is not enough to scare investors away from the equity market at this time when economic recovery is ongoing, even as oil price sells farther above the nation’s budget benchmark price.
“This is expected to support government spending and project execution, by reducing the projected deficit for the year that would be financed through the capital market, as well as ways and means through the central bank.
“We expect the mixed trend to continue as more corporate earnings hit the market in the face of rising fixed income market yields, oil prices and high dividend yields during this earnings season.
Analysts at Codros Capital said: “We expect the choppy theme that played out this week to persist in the week ahead as investors continue to cherry-pick dividend-paying stocks and, at the same time, exhibit reluctance in leaving gains in the market.
“With uncertainties about the direction of yields in the FI market still bugging investors’ minds, the bears are likely to retain dominance in the market.
A review of market performance last week showed that transactions on the NSE reopened in an uptrend on Monday, occasioned by gains in some blue-chip stocks, especially Ardova and Lafarge Africa, causing the ASI to appreciate by 0.17 per cent.
At the close of transactions, the ASI gained 64.96 absolute points, representing a growth of 0.17 per cent to close at 39,396.57 points. Similarly, the overall market capitalisation value rose by N34 billion to close at N20.612 trillion.
The uptrend was also driven by price appreciation in medium and large capitalised stocks amongst which are; Lafarge Africa, Ardova, FBN Holdings (FBNH), Access Bank and Champion Breweries.
The NSE reversed previous gains to close on a bearish note on Tuesday, as most blue-chip stocks depreciated, causing market capitaliisation to plunge by N371 billion.
The ASI fell by 709.72 points or 1.80 per cent to 38,686.85 points. Accordingly, investors lost N371 billion in value as market capitalisation declined to N20.241 trillion.
The downturn was impacted by losses recorded in medium and large capitalised stocks including Lafarge Africa, United Bank for Africa (UBA), Greif Nigeria, Northern Nigeria Flour Mills (NNFM) and Zenith Bank.
Following gains in most highly capitalised stocks, transactions on the floor of the NSE reversed losses, to close in an upbeat on Wednesday, as market capitalisation appreciated by N128 billion.
The ASI increased by 244.40 absolute points, representing a rise of 0.63 per cent to close at 38,931.25 points. Market capitalisation value gained N128 billion to close at N20.369 trillion.
The market gain was driven by price appreciation in large and medium capitalised stocks amongst which are; Nestle Nigeria, Dangote Cement, Nigerian Breweries, May & Baker Nigeria and Africa Prudential.
Trading on the nation’s bourse closed on a negative note on Thursday, following the price depreciation in Dangote Cement and 10 others as ASI depreciated by 0.60 per cent.
The ASI dipped by 234.08 absolute points, representing a decrease of 0.60 per cent to close at 38,697.17 points while the overall market capitalisation value lost N122 billion to close at N20.247 trillion.
The downturn was driven by price depreciation in large and medium capitalized stocks amongst which are; Dangote Cement, Zenith Bank, United Capital, University Press and United Bank for Africa (UBA).
Last week, a turnover of 1.675 billion shares worth N23.541 billion was recorded in 21,732 deals by investors on the floor of the exchange, lower than a total of 2.092 billion shares valued at N29.744 billion that was exchanged hands in 24,238 deals during the preceding week.
The financial services industry (measured by volume) led the activity chart with 1.200 billion shares valued at N10.272 billion traded in 12,518 deals; thus contributing 71.64 per cent to the total equity turnover volume and value respectively.