- Banking index emerges worst loser as investors dump shares
The domestic equities market experienced another week of bearish sentiment last week as the bourse witnessed market-wide negative sentiment which dragged the benchmark index into the negative territory by 1.09 percent week on week on a low-traded volume and value.
This is as investors offload their equities holding despite the influx of strong earnings performance reports by the top banks as well as impressive payout ratio by growth in dividend seen so far.
Furthermore, the market capitalisation of listed equities went southward in the two sessions witnessed in the review week by 1.08 percent week on week to N57.86 trillion.
The market’s pullback was attributed to mixed corporate earnings and economic headwinds, compounded by anticipation surrounding the publication of consumer price inflation data for March.
Resultantly, equity investors lost a total of N632.95 billion from the two sessions while the year to date return of the market printed at 36.83 percent. Trading activity in the week was downbeat with weak market breadth as evidenced in the total number of losers that outnumbered the gainers in the ratio 39:19. Similarly, investors continue their portfolio rebalancing activities amidst the outcome of the Friday’s NT-Bills auction which offered attractive yields.
As a result, the weekly traded volume printed negative by 69.24 percent week on week to 1.13 billion units consumed in 21,921 deals and marking a 46.17 percent decline during the week. In the same manner, the traded value for the week plummeted further by 50.51 percent week on week to N28.65 billion.
On the sectoral performance, it was a market-wide bearish performance as the NGX-Banking index led the laggards by 7.22 percent week on week driven by adverse price movements in ZENITH, GTCO, ACCESS and FBNH. Trailing, were the NGX-Insurance (2.45%), NGX-Consumer Goods (1.33%), NGX-Oil & Gas (0.28%), and NGX Industrial Goods Index (0.23%) which got dragged by southward movement in FLOUR MILL, SUNASUR, DANGSUGAR, ETERNA, WAPCO and ABBEYBDS respectively.
At the close of the week, the best performed stocks for the week included MORISON, OANDO, TRANSCORP, DEAPCAP, and OMATEK as their share prices trended upward by 21 percent, 11 percent, 10 percent, 10 percent, and 9 percent in that order.
However, the worst performance stocks for the week are ACCESSCORP, UCAP, GTCO, FLOURMILL, and SUNUASSUR as their share prices plummeted by 15 percent, 14 percent, 14 percent and 13 percent.
According to stock market experts at Cowry Asset Management Limited, this week, the current trend of corrections is expected to persist as market fundamentals undergo changes amidst increasing volatility, portfolio rebalancing, and sector rotation by investors and fund managers.
“We think investors will closely monitor expected earnings numbers, published macroeconomic data and government policy direction for further guidance.
Meanwhile, we continue to advise investors on taking positions in stocks with sound fundamentals,” Cowry said in a report.
The global equities market experienced mixed sentiments in the same period as investors grappled with new inflation data, which dampened expectations regarding the timing and magnitude of potential interest rate cuts by the Federal Reserve. Accordingly, US equities (DJIA: -1.1%; S&P 500: -0.1%) were poised for their second consecutive weekly decline, as the March consumer inflation report diminished hopes of a June rate cut by the Federal Reserve.
Elsewhere, European equities (STOXX Europe: +0.5%; FTSE 100: +1.0%) were on track to finish the week higher as investors digested UK GDP data and ECB interest rate decision. In Asia, the Chinese market (SSE: -1.6%) faced pressure due to several factors, including (1) currency weakness, (2) disappointing economic data relating to inflation and trade, and (3) reduced expectations for US interest rate cuts.
Meanwhile, the Japanese market (Nikkei 225: +1.4%) rebounded from last week’s losses driven by a weaker yen and gains in tech stocks. Emerging Markets Index (MSCI EM: +0.9%) remained positive, supported by bullish sentiments in India (+0.3%) and Taiwan (+2.0%), while the Frontier Markets index (MSCI FM: -1.4%) declined following the loss in Romania (-0.6%).
