By Audrey Lotechukwu
FRI 28 MAY, 2021-theGBJournal- The bears continued to dictate proceedings in the local bourse as the market suffered its second consecutive weekly loss. Save for the last trading day; the local bourse recorded losses in all of the week’s trading sessions.
FLOURMILL (-5.1%), GUARANTY (-4.3%), and BUACEMENT (-3.0%) were the primary drivers of the market loss, dragging the All-Share index down by 0.2% to close the week at 38,256.99 points
Consequently, the MTD and YTD return dipped further into negative territory, settling at -4.0% and -5.0%, respectively. Activity levels were weaker than the prior week, as trading volume and value declined by 1.0% w/w and 17.9% w/w, respectively.
Overall, total turnover of 1.037 billion shares worth N9.471 billion in 17,577 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 1.048 billion shares valued at N11.543 billion that exchanged hands last week in 17,233 deals, according to NGX Exchange data.
Trading in the top three equities namely Zenith Bank Plc, Guaranty Trust Bank Plc and Fidelity Bank Plc (measured by volume) accounted for 229.453 million shares worth N4.281 billion in 3,634 deals, contributing 22.12% and 45.20% to the total equity turnover volume and value respectively.
Sectoral performance was broadly negative, following declines in the Banking (-1.8%), Industrial Goods (-0.4%), and Consumer Goods (-0.1%) indices, and gains in the insurance (+1.0%) and Oil and Gas (+1.0%) indices.
The Financial Services Industry (measured by volume) led the activity chart with 687.623 million shares valued at N5.659 billion traded in 9,506 deals; thus contributing 66.29% and 59.75% to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 106.138 million shares worth N545.020 million in 1,146 deals. The third place was ICT Industry, with a turnover of 84.310 million shares worth N350.698 million in 604 deals
We still expect a choppy theme in the week ahead, with the bears dominating proceedings in the absence of positive triggers to spur a bullish performance. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the fragility of the macroeconomic environment remains a significant headwind for corporate earnings.
Meanwhile, Global stocks staged a massive comeback this week as investors’ sentiments were buoyed by renewed optimism that the US will spearhead the global economic recovery. This was underpinned by (1) reports that the US President, Joe Biden, will propose a USD6.00 trillion spending plan for the 2022 fiscal year and (2) strong labor market data in the US.
In the US, the DJIA (+0.8%) and S&P (+1.1%) were poised for a weekly gain following the bounce in tech stocks earlier in the week, amid strong labor market data, which showed that unemployment claims fell to a new pandemic low.
In Europe, the STOXX Europe (+0.9%) and FTSE 100 (+0.4%) posted gains as risk sentiment strengthened, as the strong economic data from the US reinforced hopes of a robust economic recovery. Asian markets posted positive performances, with the Japanese (Nikkei 225: +2.9%) and Chinese (SSE: +3.3%) markets receiving a massive boost from the rally on Wall Street.
Similarly, the Emerging (MSCI EM: +1.8) and Frontier (MSCI FM: +0.5%) stocks also mirrored the upbeat mood across global equities consequent on the gains in China (+3.3%) and a robust gain in the Vietnamese (+2.8%) market, respectively.