Equities remain volatile in festive season’s profit-taking

The equities market continued its lackluster performance at the close of transactions last week over sustained risk-off sentiments and the absence of market catalysts. With losses recorded in two of the three trading sessions in the shortened week due to festive season, the All-Share Index and market capitalisation declined by 0.41 percent to close the week at 26,416.48 points and N12.753 trillion respectively.

The drop in indices, may, however, be attributed partly to the two days public holiday declared during the week to mark the Christmas celebrations. All other indices finished higher with the exception of NSE Premium, NSE Banking, NSE-AFR Div Yield, and NSE Industrial Goods indices, which depreciated by 2.10 percent, 0.26 percent, 0.42 percent, and 0.31 percent respectively, while the NSE ASeM Index closed flat.

Analysts predict sustained volatility amid profit-taking, as investors take advantage of low prices, ahead of the year-end rally. Specifically, analysts at Codros Capital Limited said: “We see the level of activity and volatility being sustained over the final days of the year, with some pockets of gains expected, as fund and portfolio managers realign portfolios prior to the start of 2020.”

The Chief Research Officer of Investdata Consulting Limited, Ambrose Omodion, also said: “We expect a mixed performance as the year winds down amid profit-taking and investors taking advantage of low prices, ahead of the year-end rally.

“There are also the changing sentiments in the hope of improved liquidity and positive economic indices. We expect that Investors would focus on the upcoming full-year earnings season, targeting companies with strong potential to grow their dividend on the strength of their earnings capacity.

Last week, a turnover of 735.702 million shares worth N7.132 billion was recorded in 7,138 deals on the floor of the exchange in contrast to 1.381 billion shares valued at N15.504 billion that exchanged hands last week in 14,528 deals.

The financial services industry (measured by volume) led the activity chart with 610.677 million shares valued at N4.710 billion traded in 4,319 deals; thus contributing 83.01 percent to the total equity turnover volume. The consumer goods industry followed with 43.359 million shares worth N1.097 billion in 1,062 deals. The conglomerates industry ranked third with a turnover of 37.576 million shares worth N63.537 million in 269 deals.

Trading in the top three equities, namely, Law Union and Rock Insurance Plc, Access Bank Plc and United Bank for Africa Plc (measured by volume) accounted for 320.699 million shares worth N1.587 billion in 1,063 deals, contributing 43.59 percent to the total equity turnover volume. Also 1.074 million units of Federal Government Bonds valued at N1.283 billion were traded this week in 24 deals, compared with a total of 4,990 units valued at N5.541 million transacted last week in 8 deals. Rank Security Deals

About 31 equities appreciated in price during the week, lower than 33 equities in the previous week and 17 equities depreciated in price, lower than 25 equities in the previous week, while 117 equities remained unchanged, higher than 107 equities recorded in the preceding week.