Banking contributes 85% to turnover as investors stake N36b in equities

Three bank stocks – Fidelity Bank Plc, Access Holdings Plc, and FBN Holdings Plc – drove activities in the financial service sector of the Nigerian Exchange Limited (NGX) last week.

With the development, the financial sector maintained its dominance in volume terms with 3.15 billion shares valued at N27.5 billion traded in 14,987 deals thus contributing 87.5 per cent to the total equities turnover.

Trading in the top three equities – Fidelity Bank Plc, Access Holdings Plc, and FBN Holdings Plc – accounted for 2.2 billion shares worth N18.7 billion in 5,083 deals, contributing 60.2 per cent to the total equity turnover.

Following the banking sector in volume terms was the conglomerate industry with 99.4 million shares worth N219.5 million in 901 deals. The consumer goods industry, with a turnover of 87.434 million shares worth N1.6 billion in 3,768 deals.

On the whole, a total turnover of 3.6 billion shares worth N36.5 billion in 27,801 deals was recorded by investors on the floor of the Exchange, in contrast to a total of 2.9 billion units valued at N22.8 billion that was exchanged in 23,765 deals on May 5, 2023.

On the activity chart, the equities market could not consolidate the gains of the prior week following pressure from profit-taking activities during the week.

Particularly, sell pressures on BUA Cement (-8 per cent) dragged the all-share index and market capitalisation by 0.5 per cent to close the week at 52,214.62 and N28.431 trillion respectively.

All other indices finished higher except for NGX Main Board, NGX 30, NGX Banking, NGX AFR Bank Value, NGX MERI Value, NGX Industrial Goods, and NGX.

Sovereign Bonds depreciated by 0.85 per cent, 0.12 per cent, 0.99 per cent, 1.45 per cent, 1.11 per cent, 3.36 per cent and 4.83 per cent respectively while the NGX ASeM index closed flat.

Operators linked the selling pressure to uncertainty in the global space and weak macroeconomic environment, coupled with an uptick in the fixed-income market.

Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion said: “China’s economic recovery had remained weak in the face of central banks rate hike driving economic contraction following Ukraine attack.

“This is in addition to rising geopolitical tension across the globe, the prevailing high-interest rate regime and soaring inflation, supply tightened due to the Russia-Ukraine war that has entered the second year and the unstable oil price. These factors remain a potent threat to the world economy.

“Also, there is the uncertainty of a rate crash as the incoming government moves to drive economic growth in Nigeria, even as the suspension of the planned removal of fuel subsidy and postponement of the population census, signal the possibility of a policy shift.

“However, we note that discerning investors have continued to target fundamentally sound companies and defensive stocks to protect their portfolios.

We expect mixed sentiments to continue on profit taking and payments for dividends to support buying interest”, he said. Analysts at Codros Capital said: “We expect market performance to remain mixed in the week ahead as investors rebalance their portfolios based on an assessment of corporate earnings released for Q1, 2023.

“Nevertheless, increased FI yields may continue to constrain buying activities. Overall, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.”

Further breakdown of last week’s transactions showed that a total of 31,234 units valued at N2.9 million were traded in 68 deals compared with a total of 19,259 units valued at N2.737 million transacted in 44 deals during the preceding week.