NGX Slumps as Equities Investors Lose N305bn
The Nigerian Exchange (NGX) market capitalisation slumped as equities investors in the local bourse lost about N305 billion to selling activities of profit takers in the local bourse last week.
The slowdown reported in the four day trading sessions was primarily due to selling pressures on MTNN (-6.7%), amid strong bargain hunting on ACCESSCORP (+11.9%) and TRANSCORP (+45.0%).
With the mixed investors’ positions, key performance indicators fell as the market sustained its losing streaks. The Nigerian Exchange All-share index dipped 1.1% week on week to close at 51,355.74 points, according to stockbrokers.
Consequently, year-to-date return moderated to 0.2% from 1.3%, a downward trend line supported by activities of sell-side investors ahead of more Q1 corporate earnings inflow witnessed recently in the local bourse.
Essentially, stockbrokers spotted sell-sentiments in some of the mid and large tickers continued for the sixth straight week of negative performance on the domestic equities market.
In its market note, Cowry Asset said the volatility remains at the extreme majorly driven by mixed sentiments while investors continue to seek safer investment havens as a hedge against inflation in the face of attractive fixed income yields.
Sector-by-sector performance was largely on a mixed trend across the indices except for the Insurance and Consumer Goods sectors which appreciated by 1.14% and 0.17% week on week on the back of renewed buying interests in TRANSCORP, MANSARD.
On the other hand, Banking (-2.54%), Oil & Gas (-1.43%) and Industrial Goods (0.17%) indices emerged as the decliners this week as a result of sell-pressure in ZENITHBANK and COURTVILLE.
At the close of the week, the level of market trading activities was positive, according to trading data from the local bourse.
The total number of deals surged to 16,856 by 7.47% week on week as market players recorded higher traded volumes by 38.83% for the week to 3.92 billion units that were valued at N15.62 billion, an increase of 74.72% week on week.
Other top-gaining securities for the week were TRANSCORP (+45%), FIDELITYBK (+14%), and ACCESSCORP (+12%), while the laggards this week were ZENITH BANK (-12%), CHAMPION (-10%), and UBA (-8%).
Stockbrokers at Cowry Asset expect the current trend to linger if the selling sentiment among the highest-priced stocks moderates and liquidity in the market improves further on dividend payment as more and more companies hold their AGM for shareholders to approve the payment.
In a similar version, stockbrokers at Cordros Capital said they observed strong buying interest in TRANSCORP, supported by positive reactions to the recent announcement of the acquisition of a significant stake (5.52%) in the company by one of Nigeria’s prominent billionaires, Femi Otedola.
Cordros Capital expect the NGX’s floor to be flooded with results as the Q1-2023 earnings season commences in full swing.
“Thus, we expect decent earnings releases across the board to temper selling activities and support positive sentiments on the bourse. In the medium term, we expect investors’ sentiments to be influenced by developments in the macroeconomic landscape and the movement of yields in the fixed-income space.
“… We reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings”. Overall, equities market capitalisation declined ₦304.5 billion to ₦28.0 trillion. #NGX Slumps as Equities Investors Lose N305bn
