SAT 15 MAY, 2021-theGBJournal- Total turnover of 840.334 million shares worth N9.561 billion in 13,239 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 1.419 billion shares valued at N15.918 billion that exchanged hands last week in 18,459 deals, NGX Exchange data shows.
Trading in the top three equities namely Access Bank Plc, Zenith Bank Plc and Etranzact International Plc (measured by volume) accounted for 284.924 million shares worth N3.470 billion in 2,533 deals, contributing 33.91% and 36.29% to the total equity turnover volume and value respectively.
Buying interests were largely concentrated in banking stocks. Based on the preceding, the All-Share Index advanced by 0.8% w/w to close at 39,494.70 points. YTD return moderated to -1.9%. All other indices finished higher with the exception of NSE Sovereign Bond Index which depreciated by 10.69%, while the NSE ASeM and NSE Growth Indices closed flat.
Activity levels were weak, as trading volumes and value declined significantly by 52.4% w/w and 53.9% w/w, respectively. Specifically, investors’ interest in INTBREW (+7.6%) and bargain hunting in ZENITHBANK (+6.8%), ACCESS (+3.7%), GUARANTY (+2.7%) and DANGCEM (+1.6%) were the primary drivers of the positive performance this week.
The Financial Services Industry (measured by volume) led the activity chart with 541.015 million shares valued at N5.493 billion traded in 7,824 deals; thus contributing 64.38% and 57.45% to the total equity turnover volume and value respectively.
The ICT Industry followed with 90.382 million shares worth N571.642 million in 500 deals. The third place was Conglomerates Industry, with a turnover of 84.792 million shares worth N512.775 million in 551 deals.
Performance across sectors was broadly positive, with the Banking (+3.2%) index topping the gainers’ chart, followed by the Insurance (+1.9%), the Industrial Goods (+0.8%), and Consumer Goods (+0.3%) indices. The Oil and Gas (0.0%) index closed flat.
In the week ahead, we do not think the bulls will repeat the flawless victory that ensued this week as the bears are likely to book profit across most counters.
Consequently, we see more of a “choppy theme” as cautious trading takes centre stage ahead of a critical MPC meeting scheduled later in the month. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.
Meanwhile, global stocks fell precipitously this week as investors were spooked by a jump in U.S inflation, prompting fears that the Fed will tighten monetary policy.
However, global stocks pared losses on Friday after dovish comments from Fed officials allayed fears of an abrupt end to reflation trade.
In the U.S, the DJIA (-2.2%) and S&P (-2.8%) suffered huge losses as investors sold off heavyweight “FAANG” stocks, following the Labour Department report which showed that consumer prices increased by the most in nearly 12 years- this made investors re-assess lofty valuations of tech stocks.
In Europe, the STOXX Europe (-1.4%) and FTSE 100 (-1.7%) were on course for their worst week since February as risk sentiment waned due to the sell-off in U.S and Asia. In Asia, the Nikkei 225 (-4.3%) mirrored the rout on Wall Street.
In comparison, the SSE (+2.1%) bucked the trend in global equities and halted a three-week decline as sentiments were lifted by a resilient U.S labour market report which helped soothe inflation concerns.
Emerging markets (MSCI EM: -4.1%) posted losses consequent to the weakness in India (-1.0%), which masked gains in China (+2.1%), while Frontier (MSCI FM: -0.1%) market stocks declined marginally, primarily driven by the sell-offs in Kenya (-3.2%) which masked gains in Nigeria (+0.8%).