Equities trading in the week ended April 26, 2024, showed that investors’ sentiment remains bearish and weak despite the seeming oscillation in stock prices which resulted in pockets of sell-offs and profit booking in some of the highly priced tickets as well as blue-chip companies.
The domestic equities market was in a see-saw mode as the benchmark all-share index took another beating by 1.39 percent week on week to close below the 100k psychological mark for the second consecutive week at 98,152.91 index points resulting from the downbeat in market sentiments which came from sell-offs where investors continued shying away from equities due to promising outlook from risk-free markets.
Furthermore, the market capitalisation of listed equities went southward in all sessions witnessed this week by 1.39 percent week on week to N55.51 trillion as expectations for dividend earnings season and Q1 2024 corporate earnings wane, resulting in equity investors losing a total of N948.6 billion while the year to date return of the market printed lower at 31.3 percent as against the 33.12 percent in the prior week.
Trading activity in the review week was positive despite a weakened market breadth as evidenced in the total number of losers that outnumbered the gainers in the ratio 43:27.
As a result, the weekly traded volume advanced by 15.16 percent week on week to 1.84 billion units consumed in 37,528 deals which indicates a 16.5 percent decline from last week’s 44,915.
In the same manner, the traded value for the week soared further by 6.02 percent week on week to N34.26 billion.
On the sectoral front, performance was largely negative as the NGX-Banking index led the losses by 3.10 percent week on week driven by adverse price movements in FBNH, WEMABANK, STERLINGNG, ZENITH and FCMB.
Trailing on the losers table were the NGX-Oil & Gas (1.41%), and the NGX-Consumer Goods (1.15%), which got dragged by southward movement in the prices of OANDO, NESTLE, TOTAL, CADBURY, and OKOMUOIL respectively while the NGX- Insurance and NGX – Industrial Goods Indexes recorded some pocket of gains due to positive sentiment seen in SUNUASSUR, CAP, JAPAULGOLD and WAPCO. At the close of the week, the best performed stocks for the week included SUNUASSUR (25%), CAP (20%), LIVESTOCK (15%), JAPAULGOLD (14%), and UNILEVER (11%) as their share prices trended upward due to positive interest from investors.
However, the worst performance stocks for the week are OANDO (20%), SOVRENINS (18%), THOMASWY (17%), FBNH (16%), and WEMABANK (16%) as their share prices plummeted from negative sentiments.
Cowry Research anticipates a week of gradual gains in the market driven by dividend qualifications, despite recent reversal signals.
“Despite these signals, there are entry opportunities emerging due to the oversold nature of the market. Our outlook remains mixed, contingent on several factors including macroeconomic reports and foreign exchange market activities. Meanwhile, we continue to advise investors on taking positions in stocks with sound fundamentals,” it revealed.
On the global front, stocks rebounded in the last week’s trading as the relative easing of geopolitical tensions in the Middle East restored investors’ interest in risky assets as they pared back holdings of safe haven assets.
Having scaled back bullish positions in the last few weeks, US investors renewed their interest on the back of positive earnings releases, particularly from mega-cap tech stocks, even as preliminary GDP growth numbers dampened sentiments.
As such, US equities (DJIA: +0.3%; S&P 500: +1.6%) are poised to end the week higher.
Similarly, European equities (STOXX Europe: +1.3%; FTSE 100: +2.8%) are on track for a rebound from last week’s losses as investors digest positive earnings releases. Asian equities (Nikkei 225: +2.3%; SSE: +0.8%) were also positive as technology stocks in the region tracked the rebound of US peers.
Stock experts at Cordros Research noted particularly that Japanese stocks were further supported by the general doubt of further interest rate increases, given the Bank of Japan’s outlook on future economic growth. Lastly, the Emerging Markets Index (MSCI EM: -2.2%) closed lower, undermined by bearish sentiments in India (-2.2%) and Taiwan (-5.8%).
The Frontier Markets index (MSCI FM: -2.9%) also posted losses driven by huge selloffs in Vietnam (-7.1%).
The Emerging (MSCI EM: +2.4%) and Frontier (MSCI FM: +1.2%) market indices also posted gains, driven by the positive performance in China (+0.8%) and Vietnam (+3.0%), respectively.
