Three banks contribute 26% to market turnover

Three bank stocks – Access Holdings Plc, Guaranty Trust Holdings Company Plc (GTCO) and Zenith Bank Plc – dominated activities in the financial service sector of the Nigerian stock market last week, contributing 26.1 per cent to activities.

With the contribution, the financial sector maintained its dominance in volume terms with 1.4 billion shares valued at N22.2 billion traded in 17,300 deals.

Hence, it contributed 72.9 per cent to the total equity turnover volume and value.Despite a nine-basis point decline in the all-share index (ASI) on the final trading day of the week, the local bourse closed in an upbeat last week, marking its ninth consecutive week of positive performance.

The positive outing was underpinned by increased demand in banking stocks: Access Corp (+9.63 per cent), Ecobank TransNational Incorporated (+9.4 per cent), United Bank for Africa (+7.3 per cent), and Zenith Bank (+6 per cent) alongside gains in Infinity (+59.3 per cent, SCOA (+28.9 per cent), and other major stocks such as MTNN (+2.7 per cent) and BUA Cement (+0.5 per cent). The year-to-date performance stood at 41.2 per cent.

Precisely, trading in the top three banks (measured by volume) accounted for 491.5 million shares worth N15.5 billion in 5,997 deals, contributing 26.1 per cent to the total equity turnover volume.

Following the banking sector in volume terms last week was the services industry with 97 million shares worth N616.265 million in 1,949 deals. The third place was the consumer goods industry, with a turnover of 86.4 million shares worth N2.1 billion in 3,819 deals.

On the whole, a total turnover of 1.9 billion shares worth N31.6 billion was recorded in 33,020 deals by investors on the floor of the Exchange, in contrast to a total of 2.4 billion shares units valued at N45 billion that were exchanged in 34,704 deals on December 8, 2023.

Consequently, the index and market capitalisation appreciated by 1.2 per cent to close the week at 72,389.23 and N39.6 trillion respectively. Similarly, all other indices finished higher except NGX Insurance, NGX ASeM, NGX Oil & Gas and NGX Growth which depreciated by 0.96 per cent, 1.04 per cent, 0.27 per cent and 5.23 per cent respectively while the NGX Sovereign Bond index closed flat.

Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion, said: “Nigerian Exchange climbed higher, building on the midweek’s strong gains to extend the bullish momentum for the fifth successive sessions as bargain hunting for banking stocks and profit taking in others continued.

“This is coming amidst the ongoing portfolio rebalancing and year-end seasonality ahead of peak NGX earnings reporting and dividend season in Q1, 2024, just as the year 2024 is setting off with a financial market reset that comes with challenges and opportunities to build new wealth for discerning market players.

“We expect positive sentiment and profit-taking to continue on a bargain hunting for dividend-paying stocks ahead of CPI reports amid sector rotation and portfolio rebalancing on the strength of the better-than-expected corporate numbers released and high yields.

“However, we note that 2024 is beginning with dividend season, however, all eyes are on the fiscal and monetary authorities to give direction to its reforms and policies so far.”

Analysts at Comercio Partners said: “We anticipate the potential for upward momentum in the upcoming week, as stocks appear appealing for purchase.
Cordros Capital said: “We expect the market to remain mixed in the coming week as investors cherry-pick counters given the absence of any significant positive catalysts. Nevertheless, we reiterate the need for investors to seek positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.”

Further breakdown of last week’s trading indicated that a total of 64,401 units of Exchange Traded Products (ETPs), valued at N43 million were traded in 559 deals last week, compared to 149,237 units worth N82.4 million transacted in 1,064 deals during the preceding week.

Also, 32,044 units of bonds, valued at N33.7 million were traded in 16 deals compared with a total of 43,802 units valued at N46.203 million transacted last week in 20 deals.

On the price movement chart, 53 equities appreciated during the week higher than 49 equities in the previous week. 32 equities depreciated lower than 33 in the previous week, while 70 equities remained unchanged, lower than 73 recorded in the previous week.