Equity Investors Book Early Loss ahead of Santa Claus Rally
Equity investors lost about N149 billion in the just concluded week due to some sort of offensive trading spotted in the stock market. Based on trading patterns, moderate stocks appreciation in the local bourse appeared to be giving birth to a heavy selloff.
The overall performance across Nigeria’s financial markets declined with unimpressive yield and bumps in the fixed income space, negative return at the NASD OTC segment and loss-making streaks in the equity segment.
Despite gaining on 3 trading sessions in the just concluded week, the Nigerian Exchange (NGX) tumbled, the benchmark index fell 0.7% to 41,882.97 points, according to Afrinvest note.
The selling rallies pull back NGX year to date return from making an upward trajectory amidst the projection that the local bourse could see red rains in the next trading sessions, a few days to the festive season before the Santa rally arrives.
On the other hand, a fresh rally could lift stock market indicators strongly – as seen in the previous years except for distortion in the price level and expectation for more spending which could drive retail selloffs.
Based on the trading pattern last week, data from the Nigerian Exchange shows that year to date return has moderated to 4.0% from 4.7%.
Overall, stock market capitalisation declined ₦148.7 billion in the just concluded week to close at ₦21.9 trillion, according to a note from Afrinvest, a leading investment banking firm headquartered in Lagos.
Meanwhile, activity level was noted to have improved as average volume and value traded rose 105.7% and 55.1% respectively to 444.9 million units and ₦3.4 billion.
The top traded stocks by volume were FBNH (1.2bn units), STERLNBANK (261.0m units), and GTCO (97.2m units) while FBNH (₦13.3bn), ZENITH (₦1.2bn), and SEPLAT (₦845.3m) led by value.
Afrinvest said the Performance of sectors within its coverage was bullish as 5 indices gained while the Industrial Goods index declined 5.4% week on week on the back of sell-off in DANGCEM (-10.0%).
Leading the gainers, the Banking index rose 5.5% week on week due to buying interest in GTCO (+10.0%), ZENITH (+8.5%), and UBA (+1.9%).
Trailing, the AFRI-ICT and Oil & Gas indices advanced 2.2% and 1.3% respectively following bargain hunting in MTNN (+4.5%) and OANDO (+7.2%). The telcos stock had shed 10% on Monday when it opened for retail investors subscriptions.
Similarly, gains in NEM (+7.6%), MANSARD (+6.5%), HONYFLOUR (+2.9%), and PZ (+0.8%) pushed the Insurance and Consumer Goods indices higher by 1.2% and 0.1% respectively.
Analysts note hinted that equity investor sentiment as measured by market breadth strengthened to 1.2x from 0.3x recorded in the previous week as 31 stocks gained while 25 stocks lost.
The top outperformers for the week were MEYER (+50.0%), ACADEMY (+20.5%), and ROYALEX (+13.2%) while UNITYBANK (-15.7%), DANGCEM (-10.0%), and LINKASSURE (-8.9%) led the laggards.
In the coming week, analysts at Afrinvest are expecting market performance to be a mix of profit-taking and bargain hunting activities. # Equity Investors Book Early Loss ahead of Santa Claus Rally
