SAT 05 JUNE, 2021-theGBJournal- It was a broadly positive performance on the local bourse, with the bulls dominating in four of the five trading days. As a result, the All-Share Index edged up by 1.2% w/w, to close at 38,726.10 points.
A total turnover of 1.082 billion shares worth N9.548 billion in 17,933 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 1.037 billion shares valued at N9.471 billion that exchanged hands last week in 17,577 deals.
The Financial Services Industry (measured by volume) led the activity chart with 767.001 million shares valued at N4.356 billion traded in 9,447 deals; thus contributing 70.86% and 45.63% to the total equity turnover volume and value respectively.
The Oil and Gas Industry followed with 83.528 million shares worth N1.454 billion in 1,118 deals. The third place was Conglomerates Industry, with a turnover of 72.813 million shares worth N356.723 million in 781 deals.
Notably, bargain hunting in large-cap stocks; DANGCEM (+3.5%), BUACEMENT (+2.8%), MTNN (+2.6%), and GUARANTY (+2.3%) buoyed market performance. Consequently, the MTD return turned positive (+0.7%), while the YTD loss moderated to -3.8%.
Also, the overall activity level was relatively stronger, as trading volume and value rose by 4.3% and 0.8%, respectively. Performance across sectors was mixed, with the Industrial (+2.6%) and Insurance (+1.2%) indices recording gains, while the Consumer Goods (-0.4%) and Oil and Gas (-0.8%) indices closed in the red. The Banking index closed flat.
Trading in the top three equities namely Sovereign Trust Insurance Plc, Zenith Bank Plc and Veritas Kapital Assurance Plc (measured by volume) accounted for 235.953 million shares worth N1.820 billion in 1,654 deals, contributing 21.8% and 19.07% to the total equity turnover volume and value respectively, according to NGX Exchange data.
In the week ahead, we expect alpha-seeking investors to continue rotating their portfolio towards equities amid moderation in the uptick of yields in the FI market.
Cordros Research say they expect market performance to be dominated by the bulls, as positioning by early birds in dividend-paying stocks ahead of H1-2021 dividend declarations should outweigh profit-taking activities.
‘’We reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.’’
Meanwhile, global stocks posted mild gains this week as investors’ sentiments hung on a balance between economic rebound and inflation concerns.
Consequently, US (DJIA: +0.1%; S&P: -0.3%) equities retreated from last week’s highs, as investors traded cautiously in anticipation of policy tightening from the Fed, amid positive data showing an increase in US non-farm payrolls in May.
European markets (STOXX Europe: +0.4% and FTSE 100: +0.4%) recorded marginal gains in reaction to the positive employment data in the US. In Asia, the Nikkei 225 (-0.7%) and SSE (-0.2%) ended the week in the red as investors were concerned that the positive US employment data would slow down central bank stimulus.
On the other hand, Emerging (MSCI EM: +1.7) stocks posted gains consequent to the rally in South Korea (+1.6%), which offset the decline in China (-0.2%). In addition, Frontier (MSCI FM: +0.9%) market index was buoyed by a positive performance in Kuwait (+1.1%).