Stocks Value down N604 Billion as Investors Offload Holdings

Stocks Value down N604 Billion as Investors Offload Holdings

Stocks value dropped down by N604 billion this week as Investors offloaded holdings for a 5-trading session straight, resulting in a decline in the market value of all stocks below N20 trillion – a three-month low in the year.

Profit-takings on the Nigerian Exchange resulted in a bloodbath just as the fixed income space traded bearishly ahead of the monetary policy committee meeting next week.

Now, many stocks are trading at the year-low, an entry point for new holdings, and of course an opportunity for portfolio adjustment. In the second quarter of 2021, a large number of institutional investors including the Pension Fund Administrators left the equity market for the fixed income space on the back of fresh yields repricing.

The local bourse reversed last week’s gain as sell pressure dominated the market on all trading days of the week, Afrinvest said in a report. The All-Share index declined by 3.0% week on week to 38,324.07 points.

Consequently, Nigerian Exchange market capitalisation fell by ₦603.5 billion to ₦20 trillion while year-to-date loss worsened to -4.8%.

This week, the activity level reduced as average volume and value traded fell by 25.2% and 27.6% to 209.5 million units and ₦2.3 billion respectively.

The most traded stocks by volume were ZENITH which transacted 108.4 million units, FBNH 64.4 million units, and FIDELITY did 61.1m units.

Leading the value chart, ZENITH transaction was valued at ₦2.5 billion, SEPLAT ₦1.3 billion, and GUARANTY did ₦680.0 million. Performance across sectors was bearish as only the Oil & Gas index gained 7.4% week on week driven by buying interest in ETERNA (+21.2%) and SEPLAT (+10.0%).

Afrinvest said leading the bearish pack is the AFR-ICT and Industrial indices, down 5.6% and 3.3% week on week respectively due to losses in AIRTELAF (-10.0%), BUACEMENT (-4.7%), and DANGCEM (-2.3%).

Similarly, the Banking and Insurance indices declined by 1.5% and 0.7% w/w respectively on the back of price depreciation in FIDELITY (-3.8%), ZENITH (-3.0), LINKASSURE (-13.0%) and SOVRENIN (-7.1%).

The Consumer Goods index also fell by 3bps w/w as a result of the decline in DANGSUGAR (-4.2%) and UNILEVER (-1.6%). Investor sentiment as measured by market breadth weakened to 0.6x from 1.9x last week as 23 stocks gained against the 39 stocks that declined.

ETERNA (+21.2%), PRESTIGE (+15.2%) and STERLING (+12.8%) led the top gainers while CILEASING (-18.8%), ROYALEX (-18.4%) and LINKASSURE (-13.0%) led the decliners.

“In the coming week, we expect the bearish sentiment to continue in the absence of any positive catalyst”, Afrinvest said.

Stocks Value down N604 Billion as Investors Offload Holdings