Profit-taking activities recorded in Stanbic IBTC, Vitafoam, Nigerian Exchange (NGX) Group and Honeywell Flour Mills pulled down market indicators at the end of last week’s transactions on the Nigerian Exchange Limited (NGX).
Specifically, Stanbic IBTC shed N3 while Vitafoam lost N2.35 kobo, and NGX Group depreciated by N2.10 kobo. Honeywell Flour Mills also declined by 28 kobos, even as the benchmark index recorded a decline in three of the five trading sessions.
Consequently, the NGX All-Share Index (ASI) and market capitalisation depreciated by 0.7 per cent to close the week at 49,695.12 and N26.805 trillion respectively.
Similarly, all other indices finished lower except NGX Insurance, NGX MERI Value, and NGX Consumer Goods Indices, which appreciated by 1.04 per cent, 0.87 per cent and 0.72 per cent, while the NGX ASM index closed flat.
Reacting to market performance, the Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion, said the oscillation trend in the market is attributable to the September effect.
According to him, there is a general belief that retail investors liquidate their portfolios within the period to offset school fees.
He listed other factors impacting negatively on the market including the August inflation report, the outcome of the forthcoming monetary policy committee meeting, fear of global economic recession and pre-election year tension, ahead of the Q3 earnings reporting season.
He added: “Also, the market continues its oscillation of making lower lows and lower highs to create buy opportunities for discerning investors as revealed by price action, volume and momentum.”
Analyst at Cordros said: “We expect alpha-seeking investors to rotate their portfolios towards cyclical stocks that delivered decent earnings during the Q2-22 earnings season amid the yield uptick in the FI market.
“However, we think the absence of a near-term catalyst will likely skew overall market sentiments to the negative side, particularly as the political space gets heated.
“Notwithstanding, we reiterate the need for positioning in only fundamentally sound stocks as the unimpressive macro environment remains a significant headwind for corporate earnings.”
Further breakdown of trading showed that a turnover of 949.8 million shares worth N9.3 billion was recorded in 18,525 deals by investors on the floor of the Exchange, in contrast to a total of 1.1 billion worth N12.9 billion that exchanged hands in 19,305 deals during the period September 2, 2022.
The financial services industry (measured by volume) led the activity chart with 735.3 million shares valued at N4.13 billion traded in 10,186 deals; thus contributing 77.4 per cent to the total equity turnover.
The conglomerate industry followed with 69.8 million shares worth N191 million in 570 deals. The third place was the ICT industry with a turnover of 44.4 million shares worth N2.8 billion in 1,744 deals.
Trading in the top three equities namely Sterling Bank Plc, United Bank for Africa Plc and Transnational Corporation Plc (measured by volume) accounted for 472.7 million shares worth N1.2 billion in 2,333 deals, contributing 49.8 per cent to the total equity turnover.
A total of 3,952 units of bonds valued at N1.7 million were traded in 32 deals compared to a total of 7,811 units valued at N837, 295.25 transacted in 25 deals during the preceding week.
Twenty-two equities appreciated during the week, lower than fort 43 equities in the previous week. Thirty-six equities depreciated 21 in the previous week while 98 equities remained unchanged.