The local bourse, Nigerian Exchange Limited, closed
The Nigerian equities market began October on a negative note, with investors losing N539 billion in market capitalisation.
Trading activities on the floor of the Nigerian Exchange Limited in the first week of the month saw investors exhibiting cautious investment trends amid prevailing macroeconomic uncertainties.
Many investors appear to be seeking portfolio rebalancing in light of global and domestic economic challenges.
The market recorded losses driven primarily by profit-taking in large-cap stocks, further eroding investors’ confidence.
The decline reflected renewed bearish sentiment, as sell-offs across key sectors like the banking and industrial goods weighed on market performance.
The NGX All-Share Index fell by a significant margin (0.95 percent) week on week to 97,520.54 points, marking a continuation of the downward trend seen in the early days of the month.
Consequently, market capitalisation of listed equities nosedived by 0.95 percent week on week to N56.04 trillion on profit taking activities across major sectors.
The year-to-date return of the index printed at 30.42 percent even as the exchange recorded more gainers (45) compared to the week’s losers of 33 and reflects the positive market breadth and internals driving market dynamics.
Market momentum was weak, fuelled by sell interest across small, mid, and large-cap stocks. As a result, the weekly trade value advanced by 188.7 percent week-on-week to N132.63 billion, while the traded volumes this week declined by 13.9 percent week on week to 2.85 billion shares, all executed in 39,529 deals translating to a 20% decrease from the previous week.
Across the sectoral spectrum, performance was in the mixed bag, with three of the five sectors under observation closing in the bullish territory.
The NGX-Oil & Gas and NGX-Insurance indexes led the charge with weekly gains of 7.29 percent and 3.81 percent, respectively, driven by buying interest in stocks such as SEPLAT, VERITASKAP, REGALINS, and NEM.
Also, the NGX-Consumer Goods index saw some pockets of gains by 0.34 percent week on week due to upticks in MECURE, INTBREW, GUINNESS and TANTALIZER in that order.
On the contrary, the NGX-Industrial Goods and, NGX-Banking indices closed the week down by 6.84 percent and 0.74 percent respectively, buoyed by downbeat sentiments in the likes of FIDELITY, FBNH, DANGCEM, BUA CEMENT and UPDC REIT.
At the close of the week, stocks like DEAPCAP whose share price rose by 32 percent, SEPLAT ENERGY 21 percent, TRIPLE G 20 percent, VERITASKAP 20 percent, and REGALINS 19 percent emerged as the top gainers, drawing significant investor attention.
Conversely, others like MCNICHOLS which lose 19 percent, FIDELITYBK 18 percent, DANGSUGAR 14 percent, FBNH 13 percent, and DANGCEM 10 percent of their share price were the week’s laggards, as investors offloaded these stocks as part of a broader portfolio rebalancing exercise.
Meanwhile, researchers at Cowry Assets Management Limited have predicted that positive outing for investors in the new week.
Forecasting what the new week holds in stock for equities investors, they said “In the coming week, we anticipate a positive outing for the local bourse as we see the local bourse showing signs of recovery heading into the final quarter of the year, while the market awaits the nine months performance scorecards of some of the early filers such as GEREGU, DANGCEM, DANGSUGAR, MTNN, amongst others.
“Nevertheless, we continue to advise investors to focus on fundamentally sound stocks.”
On their part, market analysts at Cordros Securities Limited charge investors to retain the cautious trading approach for now.
“In the near term, we expect investors to maintain a cautious trading approach, with sentiments likely skewed towards the bearish side. As such, we expect intermittent profit-taking to persist.
“However, this could be balanced by bargain-hunting activities as investors prepare for the upcoming Q3-24 earnings season,” they stated in their weekly market review report.
