Investors continued to dump the shares of highly capitalised stocks in the equities sector of the Nigerian Stock Exchange (NSE) last week, especially Airtel Africa, apparently taking advantage of their relatively high prices to make a profit in the form of capital gains.
The development, which resulted in a plunge in share prices of these companies, cut across the major sub-sectors of the market and caused the All-Share Index (ASI) and market capitalisation of the exchange to fall further by 0.3 per cent to close the week at 27,698.69 points and N13.484 trillion.
However, all other indices finished higher with the exception of NSE ASI, NSE Main Board and NSE Asem Indices, which depreciated by 0.29 per cent, 0.86 per cent and 0.60 per cent.
A breakdown of trading activities last week showed that at the reopening of transactions on Monday, there were price losses suffered by most bluechip stocks, especially Unity Bank and Airtel Africa, as market capitalisation slumped by N100 billion.
Specifically, ASI fell by 204.68 points or 0.74 per cent to 27,574.32 points. Accordingly, investors lost N100 billion in value as market capitalisation declined to N13.423 trillion.
The downturn was impacted by losses recorded in medium and large capitalised stocks, among which were Airtel Africa, Chemical and Allied Products (CAP), Cement Company of Northern Nigeria (CCNN), Dangote Cement and Unilever Nigeria.
At the close of transactions on Tuesday, records indicated that the dominance of the bears continued unabated, resulting to a further slide ASI by 0.6 per cent.
Precisely, the ASI decreased by 167.28 absolute points, representing a dip of 0.61 per cent to close at 27,407.04 points. Similarly, the market capitalisation lost N81 billion to close at N13.342 trillion.
Again, the downturn was caused by losses recorded in medium and large capitalised stocks, among which were Airtel Africa, Flour Mills of Nigeria, NCR Nigeria, Custodian Investment and Zenith Bank.
Further breakdown of last week’s transactions showed that the bulls regained vigour on Wednesday after two days of sustained negative sentiments.
Following the development, ASI surged by 274.57 points or one per cent to settle at 27,681.61 points, while market capitalisation closed at N13.475 trillion, as investors gained N133 billion.
The upturn was boosted by gains recorded in medium and large capitalised stocks, among which were Stanbic IBTC Holdings, Guaranty Trust Bank, MTN Nigeria, Ecobank Transnational Inc. (ETI) and Lafarge Africa.
Following renewed profit-taking in the shares of some blue chip companies, especially Academy Press and Neimeth International, the ASI slumped by 0.13 per cent at the end of transactions on Thursday.
The ASI decreased by 35.46 absolute points, representing a decline of 0.13 per cent to close at 27,646.15 points.
Similarly, the market capitalisation lost N17 billion and closed at N13.458 trillion.
The negative sentiments were impacted by losses recorded in medium and large capitalised stocks, amongst which are; Guaranty Trust Bank, Zenith Bank, Access Bank, Cutix and United Bank for Africa (UBA).
However, market breadth was positive, with 23 gainers versus 16 losers.
Consolidated Hallmark Insurance recorded the highest price gain of 10 per cent, to close at 33 kobo, per share.
On the market outlook for this week, analysts predicted continuous volatility, considering the effect of global market sentiments and weak domestic patronage.
Analysts at Codros Capital Limited said: “We expect the market to remain pressured given global risk-off sentiments and weak domestic participation.
“Nonetheless, we note that valuations remain attractive while price deterioration has resulted in expected dividend yields on some stocks rising significantly to levels on par with yields on Treasury bills.
“Hence, we advise that long-term investors consider appropriately timed investments.”
The Chief Research Officer of Investdata Consulting Limited, Ambrose Omodion, said the gradual positioning of smart money at this stage of the market should give discerning investors and traders insight as to where, or how to invest wisely with all eyes on President Muhammadu Buhari’s newly-constituted economic advisory council to see their first move and the roadmap that can further trigger buying interest among the investing public.
“Bargain hunters should take advantage of low stock prices to position now that index had pulled back. Discerning investors should latch on it to average down and recoup their investment immediately a recovery stage is set through economic policies and things start to change gradually to influence equity prices positively.
“Investors should watch these sectors that have become defensive recently like insurance, banking, industrial goods, services, and oil/gas and will go bullish in no distance time.
“Also, with all eye fixed on the newly appointed economic advisory council to settle down and kickoff,” they said.
Further analysis of last week’s trading showed that a turnover of 1.272 billion shares worth N18.750 billion was recorded in 19,482 deals by investors on the floor of the exchange in contrast to a total of 1.147 billion shares valued at N14.082 billion that exchanged hands last week in 17,980 deals.
Also, the financial services industry (measured by volume) led the activity chart with 945.947 million shares valued at N9.743 billion traded in 11,046 deals; thus contributing 74.38 per cent to the total equity turnover volume.
The consumer goods industry followed with 82.934 million shares worth N5.556 billion in 2,862 deals.
The third place was conglomerated Industry with a turnover of 80.821 million shares worth N267.101 million in 1,163 deals.
Trading in the top three equities namely, FBN Holdings Plc, Guaranty Trust Bank Plc and Access Bank Plc (measured by volume) accounted for 482.334 million shares worth N6.561 billion in 4,724 deals, contributing 37.93 percent to the total equity turnover volume and value respectively.
A total of 96 units valued at N215,654.78 were traded this week in 6 deals compared with a total of 6,540 units valued at N23,650.70 transacted last week in five deals.
A total of 17,761 units of Federal government bonds valued at N20.361 million were traded this week in five deals compared with a total of 274 units valued at N280,932.14 transacted last week in seven deals.
Also, 38 equities appreciated at price during the week, lower than 39 equities in the previous week and 29 equities depreciated in price, higher than 19 equities in the previous week, while 99 equities remained unchanged, lower than 108 equities recorded in the preceding week.
