Equities record first weekly gain in three weeks

As bargain-hunting in undervalued stocks lift index by 0.24%
Analysts predict poor patronage amid weak investors’ sentiments

Bargain-hunting across banking sector propelled the stock market to its first weekly gain in three weeks, as investors jostle for undervalued stocks in anticipation of good dividend yield for the earning season.

Specifically, the equities market reopened on a negative note last week, but rebounded on the following trading session before recording successive gains on Wednesday and Thursday.

A breakdown of activities during the week showed that heavy price losses suffered by most high value stocks dragged index further by 1.53 per cent at the reopening of transactions last week Monday.

Precisely, the All Share Index (ASI) fell by 399.89 points or 1.53 per cent to 25,816.57 points.

Accordingly, investors lost N209billion in value as market capitalisation declined to N13.449trillion.

The downturn was impacted by losses recorded in medium and large capitalised stocks, amongst which were; Nestle Nigeria, Chemical and Allied Products (CAP), Lafarge Africa, Unilever Nigeria, and Guaranty Trust Bank.

At the close of transactions on Tuesday, the market rebounded to close with a gain of 1.70 per cent, halting the down trend of seven consecutive trading days, following gains in MTN Nigeria, Access Bank, and 21 other stocks.
Consequently, the ASI increased by 438.54 absolute points, representing a growth of 1.70 per cent to close at 26,255.11 points. Similarly, the overall market capitalisation size gained N232billion to close at N13.681trillion.

The upturn was impacted by gains recorded in medium and large capitalised stocks, amongst which were; Nestle Nigeria, MTN Nigeria, Guaranty Trust Bank, Zenith Bank, and Access Bank.

On Wednesday, equities market sustained gaining streak, as investors continue to take position in some highly-capitalised stocks, resulting to a further rise in market capitalisation by N84billion.

The ASI increased by 160.43 absolute points, representing a growth of 0.61 per cent to close at 26,415.54 points.

Similarly, the overall market capitalisation size gained N84billion to close at N13.765trillion. The upturn was impacted by gains recorded in medium and large capitalised stocks, amongst which were; Nigerian Breweries, UAC of Nigeria (UACN), Access Bank, Ecobank Transnational Corporation (ETI), and FBN Holdings.

Consequently, the NSE All-Share Index appreciated by 0.24 per cent last week.

All other indices finished higher with the exception of NSE Main Board, NSE Pension, NSE AFR Div Yield, NSE MERI Growth, NSE Consumer Goods, NSE Lotus and NSE Industrial Goods indices which depreciated by 1.34 per cent, 0.91 per cent, 0.91 per cent, 2.36 per cent, 5.87 per cent, 2.28 per cent, and 4.27 per cent while NSE ASeM Index closed flat.

But analysts predict gloomy outlook amid weak investors’ sentiments across all sectors
Precisely, analysts at Codros Capitàl said: “Despite the market closing positive this week, sentiments remain weak. Hence, we advise investors to trade cautiously, taking positions in fundamentally justified stocks.”

Afrinvest Research said: “We anticipate a mixed performance in the coming week as we expect both profit taking activities and bargain hunting to dominate trade.”

Further analysis of lastweek’s transactions showed that a turnover of 1.814 billion shares worth N26.008billion was exchanged in 23,494 deals by investors on the floor of the Exchange, in contrast to a total of 1.547 billion shares valued at N24.263billion that changed hands in 21,646 deals during the preceding week.

On the activity chart, financial services industry (measured by volume) led the activity chart with 1.382 billion shares valued at N16.909billion traded in 16,275 deals; thus contributing 76.20 per cent to the total equity turnover volume.

The services sector followed with 98.557 million shares worth N263.837million in 369 deals.

The third place was ICT industry, with a turnover of 89.782 million shares worth N598.016million in 800 deals.

Trading in top three equities namely, Guaranty Trust Bank Plc, Zenith Bank Plc and United Bank for Africa Plc (measured by volume) accounted for 784.482 million shares worth N14.610billion in 9,337 deals, contributing 43.25 per cent to the total equity turnover volume.

A total of 8,193 units valued at N68.491.03 were traded last week in 11 deals, compared with a total of 8,250 units valued at N69,155.40 transacted last week in 14 deals.

Also, 61,750 units of Federal Government Bonds valued at N69.995 million were traded this week in 27 deals, compared with a total of 6,321 units valued at N7.194million transacted last week in 28 deals.

On the price movement chart, three equities appreciated in price during the week, higher than six equities in the previous week.
About 25 equities depreciated in price, lower than 58 equities in the previous week, while 102 equities remained unchanged, higher than 99 equities recorded in the preceding week.