Equities Market Cap Falls by N108bn as Investors Book Profits
The Nigerian Exchange (NGX) market capitalisation declined by about N108 billion week on week due to crushing selloffs amidst nationwide protests.
Weak macroeconomic conditions and rising poverty caused Nigerians across all the walks of life to protests last week, disrupting business activities.
The equities market had share of the trouble, as investors took profit over uncertainties apart from the fact that corporate earnings releases have been unimpressive thus far.
“… position taking and sell-offs despite the ongoing half-year earnings reporting season following the influx of corporate numbers coming in impressive, mixed and disappointing folds for equity investors”, Cowry Asset Limited summarized the trading pattern in an email note.
Stockbrokers said the negative close serves as a reflection of the impact of government policies and weakening economy even as the benchmark index retreated amidst negative internals, lower traded volumes and low valuations.
The record showed that the All-share index nosedived by 0.46% week on week to 97,745.73 points while the market capitalisation moved southward.
Equities investors were noted to continue their sectoral realignment heading into a new trading month of August following the negative close of 2.28% in July on the back of weak market fundamentals.
Cowry Asset Limited said this movement was underpinned by waning investors’ sentiment across sectors which led to the loss of N107.7 billion in four of the five sessions this week while the year-to-date return of the index printed at 30.7%.
Across the sectoral front, it was a mixed outing as three out of the five sectors under ended on a negative note.
The consumer goods index led the laggards this week by 3.33% week on week due to losses sustained by Nestle Nigeria among others.
The banking and industrial indexes also retreated by 0.48% and 0.01% week-on-week due to price declines in MECURE, NASCON, BERGER, UBA, and FBNH.
In contrast, the oil and gas and insurance indexes performed positively, gaining 4.27% and 1.59% week-on-week, driven by price increases and buy interest in OANDO, ETERNA, MANSARD, and CONERSTONE respectively.
In addition to the downbeat market performance, the market participation levels waned, mirroring the trend seen in the previous week, stockbrokers said.
Total traded volume declined by 4.63% to 3.39 billion units. However, the number of trades soared by 4.53% week on week to 44,814 deals, Total value traded rose by 10.77% week on week to N52.30 billion.
Stock market analysts at Cowry Asset Limited said this comes on the back of mixed sentiments triggered by expectation for a further pull back in the market.
At the close of the week, the top-performing stocks included RTBRISCOE (+25%), OANDO (+24%), IMG (+21%), CUSTODIAN (+20%), and MAYBAKER (+19%).
On the flip side, stocks such as UNITED CAPITAL (-69%) MECURE (-19%), THOMASWY (-29%), CHELLARAM (-18%) and NASCON (-13%) faced declines in their share prices, respectively.
Stockbrokers foresee a mixed trend with a possibility of profit-taking in the new week amidst protests. Investors are likely to engage in sectoral rotation, capitalizing on stocks that experience pullbacks to position themselves strategically, Cowry Asset limited said in an emailed to investors.
The firm posited that this rotation strategy is expected to create buying opportunities, especially in anticipation of upcoming releases and dividend announcements from major banking institutions in the corporate reporting season. #Equities Market Cap Falls by N108bn as Investors Book Profits
