Capital market analysts have predicted mixed performance for equities this week, as investors rebalance their portfolios based on an assessment of corporate earnings released for first quarter (Q1), 2023.
The benchmark index of the local equities market nosedived last week on bargain hunting activities as investors stood to book profit on the back of sell-offs in some highly priced stocks and blue-chip companies and lower traded volumes and values despite the releases of corporate actions and dividend payments.
This is just as dividend payments provide more money for investors who are reshuffling their portfolios, to reposition in value stocks amid the continued oscillations in rates and yields in the fixed income space especially at the National Treasury Bills Primary Market Auction where all tenors’ rates suffered declines to close at 4.5 per cent, 6.44per cent and 8.99 per cent for the 91, 182 and 364-day tenors, the market still trades above the 20-day simple moving average.
Going into the new week, analysts at Cowry Assets Management Limited anticipated a varied investor sentiment to linger on profit-taking and payments for dividend to support buying interest, just as investors react to corporate earnings ahead of markdown dates, April inflation report, MPC meeting and continued outstanding. “However, we continue to advise investors to trade on companies’ stocks with sound fundamentals and a positive outlook,” Cowry Assets said.
Cordros Securities Limited said:“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.”
Last Week’s Trading Activities
The Nigerian equities market could not consolidate the gains of the prior week following pressure from profit-taking activities during the week. Thus, the All-Share Index dipped by 0.48 per cent week-on-week (W-o-W) to close at 52,214.72 points. Similarly, market capitalisation shed N136 billion W-o-W to close at N28.431 trillion.
Sectoral performance last week was a mixed bag as the NGX Oil & Gas index emerged as the top performing index with 5.20 per cent gain W-o-W. NGX Insurance index followed with a gain of 1.20 per cent, while NGX Consumer Goods index rose by 0.89 per cent. On the contrary, the NGX Industrial index recorded a weekly loss of 3.36 per cent, while NGX Banking index declined by 0.99 per cent W-o-W.
However, market breadth for the week was positive as 48 equities appreciated in price, 30 equities depreciated in price, while 78 equities remained unchanged. CWG led the gainers table by 56.82 per cent to close at N2.07, per share. Ardova Plc followed with a gain of 37.50 per cent to close at N26.40, while Transnational Corporation went up by 33.51 per cent to close to N2.59, per share.
On the other side, C & I Leasing led the decliners table by 19.60 per cent to close at N3.20, per share. Access Holdings followed with a loss of 12.00 per cent to close at N9.90, while Royal Exchange declined by 11.48 per cent to close at 54 kobo, per share.
Overall, a total turnover of 3.602 billion shares worth N36.451 billion in 27,801 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 2.973 billion shares valued at N22.828 billion that exchanged hands previous week in 23,765 deals.
The Financial Services Industry (measured by volume) led the activity chart with 3.150 billion shares valued at N27.484 billion traded in 14,987 deals; contributing 87.47 per cent and 75.40 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 99.394 million shares worth N219.455 million in 901 deals, while the Consumer Goods Industry traded a turnover of 87.434 million shares worth N1.628 billion in 3,768 deals.
Trading in the top three equities; Fidelity Bank, Access Holdings, and FBN Holdings (FBNH) accounted for 2.167 billion shares worth N18.650 billion in 5,083 deals, contributing 60.17 per cent and 51.16 per cent to the total equity turnover volume and value respectively.