Revenue Generated Banks: Fidelity Bank Plc, Access Holdings Plc, and FBN Holdings Plc were the three bank stocks that dominated activity last week on the Nigerian Exchange Limited (NGX)’s financial services market.
With the development, the financial sector continued to dominate in terms of volume, trading 3.15 billion shares worth N27.5 billion in 14,987 deals, or 87.5% of the overall turnover of stocks.
Trading in the top three stocks, Fidelity Bank Plc, Access Holdings Plc, and FBN Holdings Plc, contributed 60.2% of the total equity turnover with 2.2 billion shares worth N18.7 billion in 5,083 trades.
The conglomerate business came in second to the banking sector in terms of volume, with 99.4 million shares worth N219.5 million transacted in 901 deals. The consumer goods sector had 3,768 transactions totaling 87.434 million shares for N1.6 billion.
Investors on the Exchange’s floor transacted 3.6 billion shares worth N36.5 billion in total in 27,801 trades, compared to 2.9 billion units worth N22.8 billion in total transacted in 23,765 deals on May 5, 2023.
According to the activity chart, profit-taking activities during the week made it difficult for the equity market to hold onto its gains from the previous week.
The all-share index and market capitalization were particularly impacted by sell pressure on BUA Cement (-8%), which decreased them by 0.5% to conclude the week at 52,214.62 and N28.431 trillion, respectively.
Except for NGX Main Board, NGX 30, NGX Banking, NGX AFR Bank Value, NGX MERI Value, NGX Industrial Goods, and NGX, all other indices finished higher.
While the NGX ASeM index ended the day flat, sovereign bonds lost 0.85 percent, 0.12 percent, 0.99 percent, 1.45 percent, 1.11 percent, 3.36 percent, and 4.83 percent, respectively.
Operators attributed the selling pressure to increased fixed-income market activity, global uncertainty, and a bad macroeconomic climate.
Ambrose Omordion, the Chief Research Officer of Investdata Consulting Limited, said: “China’s economic recovery had remained weak in the face of central banks rate hike driving economic contraction following Ukraine attack.”
“This is in addition to rising geopolitical tension across the globe, the prevailing high-interest rate regime and soaring inflation, supply tightened due to the Russia-Ukraine war that has entered the second year and the unstable oil price. These factors remain a potent threat to the world economy.”
“Also, there is the uncertainty of a rate crash as the incoming government moves to drive economic growth in Nigeria, even as the suspension of the planned removal of fuel subsidy and postponement of the population census, signal the possibility of a policy shift.”
“However, we note that discerning investors have continued to target fundamentally sound companies and defensive stocks to protect their portfolios.”
We anticipate conflicting feelings regarding dividend payments and profit-taking to sustain buying interest, the executive said. According to Codros Capital analysts: “We expect market performance to remain mixed in the week ahead as investors rebalance their portfolios based on an assessment of corporate earnings released for Q1, 2023.”
“Nevertheless, increased FI yields may continue to constrain buying activities. Overall, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.”
Further analysis of the transactions from the previous week revealed that a total of 31,234 units worth N2.9 million were exchanged in 68 deals, as opposed to 19,259 units worth N2.737 million that were traded in 44 deals the week before.
