Mixed trends, as investors position for stock market corrections

By Peter Egwuatu

Nigeria’s equity market recorded mixed and volatile sessions with the benchmark index closing higher on the last two trading days to halt the previous three consecutive days of decline.

However, the value of investors’ assets on the Nigerian Exchange Limited, NGX, lost N34 billion as market capitalization dropped to N20.455 trillion from N20.489 trillion last week.

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Meanwhile, investors rekindled buying interest in banking stocks after Access Bank released its impressive half-year audited financial results to the market, in addition to the price appreciation in Dangote Cement which pushed the NGX index up, to close on Friday at 39,261.01points despite the selling pressures that persisted.

A total turnover of 1.338 billion shares worth N8.65 billion in 19,830 deals were traded within the week under review by investors on the floor of the Exchange, in contrast to a total of 1.026 billion shares valued at N8.183 billion that exchanged hands the previous week in 18,102 deals

The Financial Services Industry (measured by volume) led the activity chart with 615.594 million shares valued at N4.188 billion traded in 9,021 deals; thus contributing 45.99 percent and 48.42 percent to the total equity turnover and value respectively.

The Conglomerates Industry followed with 253.392 million shares worth N280.789 million in 1,126 deals. The third place was Consumer Goods, with a turnover of 185.854 million shares worth N1.593 billion in 4,107 deals.

Trading in the top three equities namely Transnational Corporation of Nigeria Plc, Honeywell Flour Mill Plc, and Access Bank Plc (measured by volume) accounted for 450.570 million shares worth N1.492 billion in 3,696 deals, contributing 33.66 percent and 17.25 percent to the total equity turnover volume and value respectively.

All other indices finished lower with the exception of NGX Insurance, NGX AFR Div Yield, NGX MERI Growth, NGX Meri Value, and NGX Sovereign Bond indices which appreciated by 0.79 percent, 0.11 percent, 0.03 percent, 0.31 percent, and 0.65 percent respectively, while the NGX ASeM and NGX Growth Indices closed flat.

Commenting on the performance, analysts at InvestData Consulting Limited, stated: “We expect that the fund recently disbursed by the Central Bank of Nigeria, CBN, to Small-Medium Scale Enterprise, SMEs in the country will trickle down to the market and boost these small-scale businesses and further boost the ongoing economic recovery.

“Regardless of the mixed outlook for September, it remains a very positive month on the exchange with strong buying positions and positive sentiments over the years.

On market outlook, the stated: “We expect a mixed trend as market players take advantage of the correction to position as many stocks enter their buy range to attract funds into the equity space, just as institutional investors and others digest the second quarter, Q2 GDP growth ahead of more first-tier banks results, as well as the continued repositioning of portfolios for the year last quarter.”