Stock market halts two weeks gains as loses index 1.03%

Stock market. Photo: NASDAQ

Although the stock market closed positive on three of the week’s four trading sessions, sell-offs in bellwethers dragged market performance last week, after two consecutive weeks of gain.

The equities market opened for four-day trading sessions last week as the Federal Government declared Monday, June 14 2021 a holiday to mark Democracy Day.

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Consequently, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) and market capitalisation depreciated by 1.30 per cent to close the week at 38,648.91 and N20.143 trillion respectively.

All other indices finished higher except NSE ASI, NSE-Main Board, NSE MERI Growth and NSE Industrial Goods, which depreciated by 1.30 per cent, 3.26 per cent, 1.33 per cent and 0.05 per cent respectively while the NSE Growth and NSE ASeM Indices closed flat.

Reacting to market performance last week, the Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion said volatility, occasioned by rising yields in fixed income has continued to impact negatively on the stock market.

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He also listed other factors that impede the growth of the market to include security challenges, high inflation, massive digital currency fluctuations, unstable exchange rates, mismatch in government policies, high unemployment rate and threats to freedom of expression.

However, he noted that huge opportunities still exist in the stock market despite all these constraining factors.

“But we must equally warn of major pitfalls that should be avoided. That is why it is so critical that you have the right knowledge, tools and strategies necessary to maneuver in the current market situation,” he said.

Analysts at Codros Capital said: “We observed that investors took full advantage of the gains recorded over the last two weeks in booking profit on bellwether stocks.

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“We expect market performance to remain mixed in the week ahead as investors rotate their portfolio towards dividend-paying stocks, which intermittent profit-taking activities would match. “Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.”

A review of market performance last week showed that after the one-day holiday declared by the Federal government to mark Democracy day celebration, sell-off in the shares of most blue-chip stocks, especially in Airtel Africa and Okomu oil dragged market capitalisation by N340 billion.

At the close of transactions last week Monday, the market capitalisation of listed equities depreciated from N340 billion to N20.069 trillion from N20.409 trillion recorded on Friday.

Similarly, the ASI also decreased by 648.99 points to 38507.29 from 39156.28.

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Investors traded 297.346 million shares valued at N3.649 billion in 4402 deals against 289.084 million shares valued at N3.545 billion in 3719 deals.

On the price movement chart, 26 stocks recorded price depreciation while 20 constituted the gainers’ chart. Airtel Africa emerged the day’s highest price loser, shedding 10 per cent to close at N753.30 kobo.

Following investors’ renewed appetite in most bluechip stocks, the nation’s bourse reversed negative streak to close in an upbeat on Tuesday, causing market capitalisation to increase by N30 billion.

Specifically, the market capitalisation of listed equities increased by 0.15 per cent to N20.099 trillion from N20.069 trillion traded on the previous day.

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The ASI also appreciated by 57.41 basis points to 38564.70 points from 38507.29 points reported on Tuesday.

Investors traded 302.722 million shares valued at N2.809 billion in 4387 deals against 297.346 million shares worth N3.649 million exchanged hands in 4402 deals.

Further breakdown of last week’s transactions indicated that a turnover of 981.147 million shares worth N10.384 billion was recorded in 15,001 deals by investors on the floor of the exchange, in contrast to a total of 1.058 billion shares valued at N12.831 billion that was exchanged in 17,854 deals during the preceding week

The financial services industry (measured by volume) led the activity chart with 695.803 million shares valued at N5.178 billion traded in 8,616 deals; thus contributing 70.92 per cent to the total equity turnover volume.

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The consumer goods industry followed with 75.879 million shares worth N1.227 billion in 2,263 deals. The conglomerate industry ranked third with a turnover of 67,430 million shares worth N367.306 million in 612 deals.

Trading in the top three equities namely Zenith Bank Plc, Sterling Bank Plc and Wema Bank Plc (measured by volume) accounted for 265.649 million shares worth N2.450 billion in 2,742 deals, contributing 27.08 per cent to the total equity turnover volume.

A total of 101,419 units of Exchange Traded Products (ETP) valued at N1.610 million were traded this week in 14 deals compared with a total of 1,026 units valued at N160, 140.75 transacted last week in eight deals.

Also, 26,452 units of bonds valued at N27.236 million were traded last week in 17 deals compared with a total of 5,335 units valued at N5.350 million transacted last week in 10 deals during the preceding week.