Tight Bears Grip: NGX Tumbles as Investors Lose N761bn
It was a dirty week in the stock market as equities investors lost more than N761 billion due to grumbling bears attack on overbought listed company’s shares. The market has started correcting prices of some stocks, while relatively unimpressive earnings releases have become a drag on buying sentiments.
Last week, stockholders relinquished their previous weekly gains as bearish sentiment resurfaced, leading to fluctuations in stock prices and prompting investors, particularly in consumer goods and insurance stocks, to engage in sell-offs.
Consequently, the benchmark index decreased by 1.36% week-on-week, closing at 98,233.76 index points as investors opted to reduce their shares in a sectoral rotation exercise, according to Cowry Asset Management Limited. The equities market closed negative for three out of five trading sessions last week as bears maintained grip on Nigerian stocks.
Stockbrokers reported that the market index, or Nigerian Exchange All Share Index, declined by 1.35% to N55.56 trillion in spite of a bucket of dividend announcements and payments.
Based on the market performance, the year-to-date return has moderated to 31.4%, trailing the annual inflation rate of 33.20%. Trading activity was positive, albeit with a slightly negative market breadth, with the number of losers outnumbering gainers in a ratio of 37:24.
Total volume traded in the equities market surged by 12.7% week-on-week to 2.19 billion units. The trade was consummated in 45,277 deals, marking a 26.45% increase from the previous week. Similarly, the traded value for the week surged by 55.21% weekoweek-on to N50.67 billion, according to update from the Lagos bourse.
Sectoral performances were mostly negative, as the Consumer Goods (-1.2%), Insurance (-1.0%), Oil and Gas (-0.3%), Banking (-0.1%) indices declined, while only the Industrial Goods (+0.1%) index gained.
The Industrial index recorded marginal gain due to positive price movements in CAVERTON, CAP, and WAPCO. For the week’s best-performing stocks, TANTALIZER led with a 28% increase, followed by FTNCOCOA (20%), PRESCO (15%), MAYBAKER (15%), and TIP (15%), buoyed by positive interest from investors.
Conversely, the worst performers included PZ (-27%), MCNICHOLS (-20%), INTBREW (-15%), AIRTELAFRI (-10%), and ETERNA (-10%), as their share prices faced downward pressure from negative sentiments.
Looking ahead to the coming week, Cowry Asset Management Limited said mixed sentiment is anticipated in the market as bulls and bears vie for dominance, while market players remain attuned to corporate actions in anticipation of dividend income. Despite this, market analysts foresee pockets of gains as fiscal and monetary policies strive to steer the nation’s economy towards recovery.
“… We expect the overall market sentiment to remain bearish in the coming week especially with no significant drivers to buoy investors’ interest. Nevertheless, we do not rule out the potential for bargain-hunting activities to emerge quietly, particularly for the banks, owing to the opportunities presented by the recent bearish trend”, Cordros Capital Limited.
Overall, bears wiped off N761.4 billion from equities market capitalisation of the Nigerian Exchange, settling at N55.56 trillion on Friday. Interest Rate: Nigerian Companies in Endless Search for Cheaper Funding Options
