With a 2.1% loss at the close of last week’s trading on the stocks market of the Nigerian Exchange Limited (NGX), the banking index once more topped the losers’ chart, boosted by price declines in certain tier-1 banks like Zenith Bank, Accesscorp, GTCO, and United Bank for Africa.
The oil and gas indices were the next to tumble last week, falling by (-0.4%). On the other hand, industrial and consumer goods had gains of 2.4% and 0.4%, respectively.
As a result, the market capitalization and NGX all-share index declined by 0.9% and 0.4%, respectively, to end the week at 64,721.09 and N35.422 trillion.
All other indices also ended lower, with the exception of the NGX Premium, NGX AFR. Div. Yield, NGX Consumer Goods, NGX Industrial Goods, NGX Growth, and NGX Sovereign Bond indices, which rose by 0.69, 0.44, 2.39, 0.37, 1.08, and 0.25 percent, respectively, while the NGX ASeM index ended flat.
Analysts foresee mixed feelings in response to market performance, citing the dismal macro environment as a big barrier to corporate earnings.
The assignment of portfolios to the ministers and the $3 billion cash loan to support intervention in Nigeria’s forex market, along with anticipated first-tier bank profits reports, they added, may, nevertheless, lead to a market recovery.
Ambrose Omordion, the chief research officer at Investdata Consulting, says specifically:
“The current market position and state of the economy call for cautious trading while discerning investors are taking advantage of the market consolidation and pullbacks.“
“It is the time to buy into value stocks with strong fundamentals, as the market looks forward to favourable and positive news that will trigger yet another round of buying interest.“
“We expect recovery as mixed sentiments continue on bargain hunting. We expect other market players to digest macroeconomic data, assigning portfolios to the ministers and the $3 billion cash loan to intervene in Nigeria’s FX market amid expected first-tier banks earnings reports and bargain hunting, while portfolio realignment and sector rotation persist.“
“However, pullbacks are creating buying opportunities amidst economic reforms of the government, just as more policy pronouncements and economic managers hit the ground running, a situation expected to offer investment direction eventually.”
Cordros Capital also added: “We expect market performance to stay mixed in the week ahead as investors rebalance their portfolios following an assessment of corporate earnings released thus far for H1, 23.“
“In the medium term, we expect investors’ sentiments to be influenced by developments in the macroeconomic landscape and the movement of yields in the fixed-income market.“
“Overall, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.”
Comercio Partners stated that: “Looking ahead, we anticipate similar activities in the upcoming trading session.” On the activity chart, a turnover of 1.7 billion shares worth N29.4 billion was recorded in 29,477 deals by investors on the floor of the Exchange.“
This amount of shares transferred exceeded the 1.7 billion units worth N25 billion that were traded in 30,652 transactions on August 11, 2023. With 1.2 billion shares worth N16.9 billion moved in 13,819 deals, the financial services sector dominated the activity chart in terms of volume, accounting for 69% of the total amount of equity turnover.
With 191.3 million shares worth N843.3 million in 1,829 sales, the conglomerate sector came in second. With a turnover of 64.3 million shares worth N810.6 million in 2,159 deals, the oil and gas sector came in third.
