THE equities segment of the Nigerian Exchange (NGX) declined by more than N256 billion due to profit-taking activities that spread over trading sessions in the local bourse last week.
For three days out of the five trading days, the stock market witnessed strong selling rallies, resulting in moderation in key performance indicators after seven consecutive weeks of bullish run.
Stockbrokers said mid-week sell pressures on MTNN (-3.6%), FBNH (-22.1%), and ACCESSCORP (-20.3%) caused a 0.8% decline in the benchmark index to 62,569.73 points as activity levels declined.
According to data from the Lagos bourse, trading volume and value declined by 46.6% and 56.4%, respectively in comparison to the previous week’s figures. The All-share index dipped to 62,568.73 points as profit-taking as sell-offs hit all kinds of equities across low, medium, and high-priced stocks across all market sectors.
This comes despite the gradual return of portfolio investors into the equities market and declining rates from the money market as seen from the last treasury bills auction, stock traders at Cowry Asset Management told investors in an update.
Market data showed that the year-to-date gain printed at 22.09%. The performance across sectors has predominantly been mixed, with the industrial and oil & gas sectors emerging as the week’s top gainers, up by 9.01% and 1.43% week on week, according to market data
The banking sector was burned deep based on its weekly performance, declining by 14.32% due to sell-offs witnessed in ACCESSCORP (-20%), FBNH (-22%), ETI (-23%), and FIDELITY BANK (-25%).
Also, the insurance sector followed closely with a notable 11.53% decrease and then the consumer goods index closed by 2.29% week on week due to negative price movements.
Market activity was robust, evident in the surge in average traded volume and value for the week. Market data showed that the number of deals closed however dipped by 4.82% to reach 54,478, indicating a downswing in sentiment within the trading environment.
However, stockbrokers said in the update that the average traded volume experienced a substantial advancement of 87.40% week-on-week, totaling 9.83 billion units.
Additionally, the weekly average value expanded by 166.37% to N145.41 billion units, compared to N54.59 billion reported in the previous week. Leading the gainers’ chart; Ticker: COURTVILLE gained 33%, MORISON jumped up by 31%, and NASCON topped up its market valuation by 22%.
On the top loser chart: Ticker: CHAMPION was priced down by 32% WEMABANK lost 26%, and STERLINGNG saw a 25% negative price movement that drowned its market valuation
“..we expect the bearish sentiment to continue as the market heads for a correction in the short term, creating an attractive entry point for discerning equity investors seeking alpha to continue targeting the fundamentally sound defensive stocks to protect their portfolios as we enter the new reporting and earning seasons.
“Also, the profit-taking activities are expected to persist in the absence of a major catalyst to trigger positive sentiments. Meanwhile, we continue to advise investors on taking positions in stocks with sound fundamentals”, Cowry Asset Management told Investors.
“With the half-year earnings season on the horizon, we believe investors will look for clues on the sustainability of the decent corporate earnings released for Q1-23.
“However, we expect mixed market performance in the week ahead as bargain hunting on dividend-paying stocks will be matched by intermittent profit-taking activities.
“Overall, we reiterate the need for taking positions in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings”, Cordros Capital told Investors in its market update.