In the just-concluded week, the local bourse snapped a sharp decline, exhibiting shades of bearishness and weakness in market activities.
This reversal undid last week’s pocket of gains, despite impressive dividend payments and signals of fund inflow into the market.
Consequently, the all-share index dipped by 0.08 percent week-on-week to 99,222.33 points as blue-chip and bellwether stocks witnessed sell-offs by investors.
Similarly, the market capitalisation of listed equities reversed last week’s gains by 0.08 percent over the week, falling from N56.17 trillion to N56.13 trillion.
This marginal decline translated into a N43.6 billion loss wiped off from the wealth of equity investors, even as the exchange recorded 33 weekly gainers against 37 weekly decliners on the back of weak market sentiment which prompted the bears to hold firm on the benchmark index, resulting in a year-to-date return of 32.7 percent.
By the close of the first trading week in June, the equities market booked gains in two out of five sessions.
Top gainers for the week included RTBRISCOE (+25%), OANDO (+24%), ETERNA (+22%), DEAPCAP (+20%), and ETI (+12%).
Conversely, negative investor sentiment led to sell-offs in UNITYBNK (-22%), SOVRENINS (-14%), TRANSCORP (-11%), SUNUASSUR (-11%), and PRESTIGE (-11%), as investors adjusted their portfolios for sectoral rotation.
Sectoral performance was mixed, with the NGX-Insurance index leading the gainers with a 0.84% increase due to gains in CUSTODIAN, NEM, LASACO, and REGALINS.
The NGX-Consumer Goods index followed, rising by 0.33% due to positive price movements in PRESCO, HONYFLOUR, INTBEW, and NIGERIAN BREWERIES. In contrast, the NGX-Banking and NGX-Oil & Gas indices saw notable week-on-week decreases of 0.62% and 0.18%, driven by losses in UNITYBNK, FIDELITYBNK, UBA, SEPLAT, OANDO, and JAPAULGOLD, respectively.
Meanwhile, the NGX-Industrial Goods index closed the week flat.
Elsewhere, trading activities were downbeat on all fronts, with negative market breadth evidenced by a decline in total volume and deals activities.
The total traded volume fell by 22.21 percent week-on-week to 1.70 billion units, while the total weekly traded value decreased by 2.58 percent to N30.49 billion.
Additionally, the total number of trades for the week plunged by 4.06 percent to 37,765. Looking ahead to this week, stock market analysts said a mixed trend is expected, driven by profit-taking activities, the publication of third-quarter earnings forecasts by corporates, and portfolio rebalancing.
Market pullbacks are anticipated to enhance the index’s upward potential, supported by the ongoing dividend earnings season.
Investors and traders are expected to also position themselves for expected macroeconomic data, such as the Consumer Price Index for the month of May.
However, investors are advised to trade in stocks of companies with sound fundamentals.
However, data made available by the NGX on Thursday showed that amidst domestic and global economic headwinds, Nigerian Exchange Limited market capitalization gained N15.25 trillion in value in the first five months of 2024 as investors continued to invest in fundamentally sound quoted companies on the bourse.
The N15.25 trillion market capitalisation growth is coming amid the spate of rising insecurity, inflation, and hikes in the Central Bank of Nigeria’s monetary policy rate, among other macroeconomic challenges and global uncertainty.
Specifically, the overall market capitalisation closed May 2024 at N56.172 trillion, gaining N15.25 trillion or 37.28 per cent from N40.917 trillion the stock market opened for trading this year.
Consequently, the NGX ASI increased to 99,300.38 basis points, about 24,526.61 or 32.8 per cent Year-to-Date performance from 74,773.77 basis points it closed for trading in 2023.
At 32.8 per cent growth in a major market index, the Nigerian stock market still maintains its position as the most performing Exchange in Africa.
Also, the management of the Exchange has enforced compliance, transparency and a market-friendly environment that continues to impact heavy participation in stock trading by both local and foreign investors.
Since the beginning of 2024, the stock market has witnessed an unprecedented rally and buying interest, especially in the industrial goods, oil & gas sector and consumer and sub-sector, which has continued to trigger massive bargain hunting in large company shares.
For instance, the NGX Industrial Index has gained 73.08 per cent YtD to 4,694.42 basis points as of May 2024, while the NGX Consumer Goods Index appreciated by 39.5 per cent to close at 1,564.19 basis points.
On the global scene, stocks traded higher for most of the week on rate cuts optimism, however, unexpectedly strong US monthly jobs data released later in the week dampened hopes the Federal Reserve would soon follow Eurozone and Canadian interest rate cuts.
As of the time of writing, US equities (DJIA: +0.7%; S&P 500: +1.7%) remained on track for weekly gains as investors assessed conflicting employment (ADP private payrolls and non-farm payrolls) data and look ahead to the Federal Reserve’s meeting next week for clues on the monetary policy outlook.
Elsewhere, the European equities markets (STOXX Europe: +1.0; FTSE 100: -0.4%) traded with mixed sentiments as investors digested fresh US jobs data and the European Central Bank’s latest interest rate commentary. In Asia, the Japanese equities (Nikkei 225: +0.5%) mirrored the positive sentiments on Wall Street, meanwhile, Chinese equities (SSE: -1.2%) declined as investors assessed the lukewarm domestic demand amid the higher-than-expected trade balance in May.
The Emerging (MSCI EM: +2.3%) and Frontier (MSCI FM: +1.0%) market indices mirrored the bullish sentiments across global stocks consequent upon gains in India (+3.2%) and Vietnam (+2.1%), respectively.
