SAT 01 MAY, 2021-theGBJournal- Bargain hunting activities gained steam on the penultimate and last trading days as investors cherry-picked stocks following decent Q1-21 corporate earnings releases.
Based on the preceding, the All-Share Index advanced by 1.4% w/w to close at 39,832.61 points. As a result, the YTD loss moderated to -1.1%. However, activity levels were weaker than the prior week, as trading volumes and value declined by 13.3% w/w and 75.1% w/w, respectively. Turnover of shares totals 1.441 billion, valued at N10.883 billion in 19,614 deals.
Notably, bargain hunting in large-cap stocks; SEPLAT (+7.5%), BUACEMENT (+7.2%), NB (+7.0%), DANGCEM (+6.4%), and MTNN (+6.0%) drove the weekly gain.
Sectoral performance was broadly positive as the Banking (-2.1%) index emerged as the week’s sole decliner. The Insurance (+3.8%) index led the gainers’ chart, followed by Industrial Goods (+2.4%) and Oil and Gas (+1.9%) indices. The Consumer Goods (0.0%) index closed flat.
Trading in the top three equities namely FBN Holdings Plc, Transnational Corporation Of Nigeria Plc and Access Bank Plc (measured by volume) accounted for 603.939 million shares worth N2.963 billion in 3,618 deals, contributing 41.91% and 27.23 to the total equity turnover volume and value respectively.
We expect mixed market performance in the week ahead as the bulls will likely increase their positions in light of decent corporate earnings released this week. On the other hand, the bears will look to take advantage of the two-week gains in cashing out given improving yields in the FI market.
Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.
Global stocks posted mild gains this week as investors’ reaction to impressive corporate earnings across developed economies was suppressed by weak economic data in the Eurozone and U.S as well as the growing number of COVID-19 cases in Asia. In the U.S, the DJIA (0.0%) and S&P (+0.7%) posted marginal gains as positive reactions to solid earnings by blue-chip companies was tempered by weak consumer spending data and a sharp rise in jobless claims.
In Europe, the STOXX Europe (+0.1%) and FTSE 100 (+0.5%) also recorded little gains as risk sentiment ebbed later in the week after the European Central Bank refrained from increasing its emergency asset purchase program.
In Asia, the Nikkei 225 (-0.7%) and SSE (-0.8%) were on course for ending the week in the red due to worse-than-expected earnings report amid worries that China is intensifying a crackdown on tech-based companies to rein in financial risks.
Emerging markets (MSCI EM: +0.9%) posted gains consequent to the rally in India (+2.6%), which offset losses in China (-0.8%), while Frontier (MSCI FM: +0.2%) market stocks posted marginal gains, primarily driven by robust gains in Nigeria (+1.4%).