Home Companies&Markets WEEKLY MARKET WRAP: All-Share Index falls below 40,000, declining by 0.96% w/w...

WEEKLY MARKET WRAP: All-Share Index falls below 40,000, declining by 0.96% w/w to close at 39,799.89 points

The Executive Chairman, FIRS, Mohammad Nami rang the closing bell at the Nigerian Stock Exchange today. Nami said FIRS would always support efforts to build confidence in the Market-FIRS Nigeria

…NB (-11.9%), LAFARGE (-7.6%), MTNN (-3.3%) and DANGSUGAR (-2.7%) drove the weekly loss

FRI 26 FEB, 2021-theGBJournal- A total turnover of 1.930 billion shares worth N20.656 billion in 24,687 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 1.541 billion shares valued at N18.235 billion that exchanged hands last week in 22,752 deals, according to Nigerian Stock Exchange (NSE) data.

The Financial Services Industry (measured by volume) led the activity chart with 1.450 billion shares valued at N15.070 billion traded in 14,236 deals, contributing 75.11% and 72.96% to the total equity turnover volume and value respectively.

The Conglomerates Industry followed with 154.906 million shares worth N179.673 million in 798 deals. The third place was Consumer Goods Industry, with a turnover of 111.782 million shares worth N2.270 billion in 3,865 deals.

Trading in the top three equities namely Wema Bank Plc, Zenith Bank Plc and First Bank Holding Plc (measured by volume) accounted for 782.167 million shares worth N8.914 billion in 4,624 deals, contributing 40.52% and 43.15% to the total equity turnover volume and value respectively

Overall, the local bourse was not immune to the rout in global equities as the market suffered its fourth consecutive weekly loss, amid growing concerns about the rising yields in the FI market.

Again, the NTB auction results wherein stop rates rose by an average of 254bps to 3.67% (from 2.33% at the last auction) also weighed on investors sentiment. Accordingly, the All-Share Index fell below the 40,000 psychological mark, declining by 0.96% w/w to close at 39,799.89 points.

Consequently, the YTD return dipped further in the negative territory, settling at -1.2%. However, activity levels were strong, as trading volumes and value rose by 25.3% w/w and 13.3% w/w, respectively. Notably, sell-offs in large-cap stocks; NB (-11.9%), LAFARGE (-7.6%), MTNN (-3.3%) and DANGSUGAR (-2.7%) drove the weekly loss.

The sectoral performance was broadly negative. Save for the Oil and Gas (+1.0%) and Banking (+0.7%) indices that posted gains, the Insurance (-4.9%), Consumer Goods (-3.2%) and Industrial Goods (-0.5%) recorded losses.   

More companies are expected to publish their audited FY 2020 numbers accompanied by dividend declarations in the coming week and analysts at Cordros Research say they believe their earnings this should provide respite for market performance.

‘’However, we expect intermittent profit-taking activities to continue due to lingering concerns about yield elevation in the FI market. As a result, we think the local bourse will likely exhibit a zig-zag pattern. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.’’

Global markets

Meanwhile, Global stocks plummeted as the spike in global bond yields unnerved investors’ concerns about an earlier-than-expected tightening of monetary policy by systemically important banks, given that global growth prospects have brightened with inflation set to increase. Consequently, U.S (DJIA: -0.3%; S&P: -2.0%) stocks were on course for weekly losses as the 10-year Treasury yield hit 1.61% (the highest level since Feb. 14, 2020) on the penultimate trading day of the week.

In Europe, the STOXX Europe (-0.8%) and FTSE 100 (+0.4%) gave up gains accumulated earlier in the week following the rout in the global bond market. In Asia, the Nikkei 225: (-3.5%) and SSE: (-5.1%) suffered huge losses as investors sold off heavyweight tech stocks in the wake of the spike in U.S. 10-year Treasury yield. Emerging markets (MSCI EM: -2.4%) stocks also mirrored in sell-off in global equities consequent on the losses in China (-5.1%) and India (-3.0%), while Frontier (MSCI FM: -1.0%) market stocks declined, following weakness in Kuwait (-0.9%) and Nigeria (-0.2%).

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