Apathy persists as investors ask for new policy direction

[FILES] Nigerian Stock Exchange

By Helen Oji
The nation’s 2019 budgeproposal is yet to be approved, keeping investments on the sidelines. The Federal Government under the new mandate are planning to retool its cabinet. Just last week, the Central Bank of Nigeria (CBN), cut interest rate by 50 basis points. Certainly, investors now have a handful of economic developments to understudy.


While the sentiment to invest was sustained at the end of last week’s transactions on the equities sector of the Nigerian Stock Exchange (NSE) despite the undervalued state of stocks at the moment, there was observed cautious approach.

For analysts, the cautious trading last week, was obvious and reflected in the volume of transactions, as investors and traders switched to waiting mode for new policy direction and in the interim, watch how the interest rate cut by 50 basis points would impact activities in economy going forward.According to them, the expected economic recovery will be slow in the short term, a situation that may not support surprising earnings expectations immediately, but called for government policy support and unveiling of a new direction to complement the monetary side in moving the economy forward.
  Analysts at Cowry Asset Management Limited expected the Nigerian equities market to close in positive territory as investors continue to take advantage of the low share prices of most companies that have posted positive financial results and increased dividend payout.“More so, with the declining stop rates for most maturities, we expect investors to shift funds in favour of equities.”

Also, Afrinvest Limited said the market would witness profit taking activities earlier this week in response to last week’s market performance and release of positive earnings. “Nonetheless, we maintain a bearish outlook for the market.”At the end of last week’s transactions, the All-Share Index depreciated by 0.31%, with other indices finishing lower too, except the NSE Premium, NSE Consumer Goods, NSE Oil/Gas and NSE Lotus II, which appreciated by 0.15 per cent, 1.07 per cent, 3.56 per cent and 1.02 per cent respectively, while NSE ASeM closed flat.
Furthermore,  a total turnover of 2.629 billion shares worth N12.794 billion was recorded in 15,558 deals by investors on the floor of the exchange in contrast to a total of 1.198 billion shares valued at N12.273 billion that was exchanged hands in 18,293 deals during the preceding week.Also, the financial services industry (measured by volume) led the activity chart with 2.346 billion shares valued at N8.602 billion traded in 9,331 deals; thus contributing 89.23 per cent  to the total equity turnover volume .
The ICT Industry followed with 140.531 million shares worth N28.117 million in 113 deals. The third place was consumer goods industry with a turnover of 54.152 million shares worth N2.099 billion in 2,613 deals.Consequently, trading in the top three equities – Wema Bank Plc, Chams Plc and Zenith Bank Plc (measured by volume), accounted for 1.948 billion shares worth N3.449 billion in 1,642 deals, contributing 74.08 per cent to the total equity turnover volume.

Exchange Traded Products (ETPs), during the week, transacted a total of 85,775 units, valued at N1.187 million, executed in 22 deals, compared with a total of 7,165 units valued at N1.933 million and transacted in preceding week in two deals.A total of 3,453 units of Federal Government Bonds valued at N3.565 million were traded this week in 24 deals compared with a total of 2,224 units valued at N2.324 million transacted last week in 18 deals.
Also, 21 equities appreciated in price during the week, lower than 32 in the previous week, as 36 others depreciated in price, lower than 38 equities of the previous week, while 111 equities remained unchanged, higher than 98 equities recorded in the preceding week.