Financial stocks dominate NGX with 67.8% as FX spot rises

The financial services industry dominated in volume terms at the end of last week’s transactions on the equities sector of the Nigerian Exchange Limited (NGX).

It led the activity chart with 1.4 billion shares valued at N25.7 billion in 20,132 deals, contributing 67.8 per cent to the total equity turnover volume.

Following the financial sector, last week was the oil and gas industry with 276.7 million units worth N6 billion in 6,848 deals.

The services industry ranked third with a turnover of 101.2 million shares worth N682 million in 2,475 deals.

Trading in the top three equities namely Guaranty Trust Holdings Company Plc, Veritas Kapital Assurance Plc and Japaul Gold & Ventures Plc accounted for 674.2 million shares worth N16,055 billion in 3,977 deals, contributing 33.2 per cent to the total equity turnover volume.

A total turnover of two billion shares worth N42.2 billion was recorded in 45,157 deals by investors on the floor of the exchange, in contrast to a total of 2.679 billion units, valued at N49.017 billion that changed hands in 47,451 deals during the preceding week.

On the price movement chart, the nation’s bourse reversed last week’s gains as the NGX all-share index and market capitalisation depreciated by 1.51 per cent to close the week at 97,100.31 and N55.132 trillion respectively, amid 13.5 per cent sell-off in BUA Cement with the month-to-date and year-to-date returns moderating to 0.7 per cent and 29.9 per cent, respectively.

Reacting to market performance, analysts at Cordros Capital Research said: “Looking ahead, we still expect bearish sentiments to remain the key theme as investors remain cautious and continue to exhibit weak appetite for equities.
“Furthermore, we believe the developments in the macroeconomic landscape and corporate actions of the upcoming earnings season will influence investors’ sentiments over the near term.”

Vetiva Dealings and Brokerage said: “The market will remain in a wait-and-see stance, as the capital market environment remains unfavorable for equities; that said, we expect to see cherry-picking action in the market as investors pursue fundamentally sound names at attractive levels.”

Meanwhile, the total turnover for the FX spot and derivatives markets for the week ending on August 16 was $907.53 million, an increase of 12.42 per cent ($100.24 million) from $807.29 million reported for the week ending on August 9.

According to FMDQ Securities Exchange, the week-on-week (WoW) increase in total turnover was jointly driven by the 11.62 per cent ($93.2 million) increase in FX spot turnover, which recorded a total value of $895.49 million, compared to $802.29 million recorded in the week ending August 9 and the 140.8 per cent ($7.04 million) increase in FX derivatives turnover.

The exchange said the WoW increase in FX Derivatives turnover was solely driven by the 140.8 per cent ($7.04 million) increase in FX Forwards turnover, whilst there was a continued lack of activity in both the exchange-traded FX futures and cleared naira-settled non-deliverable-forwards-markets.