Investors gain 2.9 per cent despite rising risks

Despite election fears and other economic challenges confronting the nation’s economy, the anticipation of improved corporate earnings and accompanying dividend declarations lifted investors’ fortune by 2.95 per cent.

A review of market performance last week indicated that the Nigerian Exchange Limited (NGX) benchmark All-Share Index and market capitalisation appreciated by 2.95 per cent to close the week at 54,213.09 points and N29.528 trillion respectively.

Similarly, all other indices finished higher except NGX Consumer Goods index, which depreciated by 0.42 per cent, while the NGX ASeM and NGX Sovereign Bond indices closed flat.

A turnover of 3.8 billion shares worth N27.5 billion was recorded in 20,333 deals by investors on the floor of the exchange, in contrast to a total of 756.8 million units valued at N13.6 billion that changed hands in 18,248 deals during the preceding week.

The financial services industry (measured by volume) led the activity chart with 3.5 billion shares valued at N7.2 billion traded in 8,978 deals; thus contributing 91.35 per cent to the total equities turnover volume.

The conglomerate industry followed with 78.3 million shares units worth N210.5 million in 746 deals. The consumer goods industry ranked third, with a turnover of 54 million shares worth N1.9 billion in 3,405 deals.

Trading in the top three equities namely Universal Insurance Plc, Guaranty Trust Holding Company Plc and Zenith Bank Plc (measured by volume) accounted for 3.048 billion shares worth N4.6 billion in 2,674 deals, contributing 80.45 per cent to the total equity turnover volume. Analysts predicted a brighter outlook as companies publish their 2022 full-year numbers, which will be accompanied by dividend declarations.

Chief Research Officer of InvestData Consulting Limited, Ambrose Omordion, said “Most of the numbers came healthy and beat analysts’ expectations. The corporate earnings have given an insight into what the company’s final dividend will look like, especially the ones that are expected to grow their payout, judging by the earnings per share and established dividend policies.

“It is time to go shopping for undervalued stocks, sectors and the next insider playing opportunity. We expect positive sentiment to continue on position and profit-taking. At this point, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.”

Analysts at Cordros Capital said: “In the subsequent weeks, we expect the NGX to be flooded with corporate earnings as more companies publish 2022FY numbers, which will be accompanied by dividend declarations.

“We believe this should provide a catalyst for buying activities even as risk-averse investors are likely to remain cautious due to medium-term expectations of an uptick in FI yields.

“Overall, we advise investors to seek trading opportunities in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.”

Furthermore, a total of one million units of Exchange Traded Products (ETFs) valued at N11.7 million were traded this week in 62 deals compared with a total of 3,892 units valued at N785, 073.87 transacted last week in 38 deals.

Fifty-five equities appreciated during the week, higher than forty-four 44 equities in the previous week. Twenty-seven equities depreciated lower than 29 in the previous week, while 75 equities remained unchanged, lower than eighty-four eighty equities recorded in the previous week.