FMDQ FX records $557.8m as financial stocks lift market volume

FMDQ Spot and Derivatives markets recorded a turnover of $557.8 million, representing a decrease of 6.63 per cent ($39.60 million) for the week ending on December 8 compared to $597.4 million achieved in the previous week.

According to FMDQ Securities Exchange, week-on-week (WoW) decrease in the total turnover was jointly driven by the 4.6 per cent ($26.81 million) and 67.7 per cent ($12.79 million) decreases in spot and derivatives turnover, respectively.

The exchange explained that the WoW decrease in FX derivatives turnover was solely driven by the 67.6 per cent ($12.7 million) decrease in FX Forwards turnover, whilst there were no trades executed in both exchange-traded FX Futures and Cleared Naira-settled Non-deliverable Forwards markets.

Also, the total value of transactions in the FX Spot market for the week-ended December 8 was $551.7 million, representing a decrease of 4.6 per cent ($26.81 million) from the value of transactions executed in the week-ended December 1 ($578.55 million).

For the week ending December 8, the average Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate was $/₦867.76, compared to $/₦848.72 recorded in the week ending December 1, representing a depreciation of the naira against the dollar by 2.19 per cent ($/₦19.04).

On the equities segment, heavy transactions in the shares of some financial stocks, especially Universal Insurance and United Bank for Africa (UBA) lifted the volume of shares traded, as a turnover of 2.4 billion shares worth N45 billion was recorded in 34,704 deals by investors on the floor of the Exchange last week.

This volume of shares traded was, however, higher than 2.5 billion units, valued at N38.6 billion and was exchanged in 36,138 deals on December 1.

Specifically, the financial services industry (measured by volume) led the activity chart with 1.7 billion shares valued at N22.8 billion traded in 18,190 deals, contributing 71.2 per cent to the total equity turnover volume.

The conglomerates industry followed with 201.5 million shares worth N2.4 billion in 1,533 deals. The third place was the consumer goods industry, with a turnover of 127.5 million shares worth N3.7 billion in 4,113 deals.

Trading in the top three equities namely Universal Insurance Plc, United Bank for Africa Plc and Guaranty Trust Holdings Company Plc (measured by volume) accounted for 543.3 million shares worth N10.6 billion in 3,860 deals, contributing 22.4 per cent to the total equity turnover.

Further, a total of 149,237 units valued at N82.359 million were traded this week in 1,064 deals compared with a total of 43,318 units valued at N10.993 million transacted last week in 308 deals.

Also, 43,802 units valued at N46.2 million were traded in 20 deals compared with a total of 17,903 units valued at N18.305 million transacted in 14 deals during the preceding week.

Consequently, the all-share index and market capitalisation of the Nigerian Exchange Limited (NGX) appreciated by 0.2 per cent to close the week at 71,541.74 and N39.149 trillion, translating to Month-to-Date and Year-to-Date returns of +0.2 per cent and +39.6 per cent.

Similarly, all other indices finished higher except NGX Main Board, NGX Insurance, NGX ASeM, NGX Oil & Gas, NGX Lotus II and NGX Industrial Goods, which depreciated by 0.54 per cent, 1.44 per cent, 1.03 per cent, 0.58 per cent, 0.22 per cent and 3.03 per cent respectively while the NGX Sovereign Bond index closed flat.

On market outlook, analysts at Codros 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.

“Overall, 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.”

Investdata Consulting Limited said: “There were expectations that the recent moves in banking stocks will usher in the Santa Claus rally, but feelings and reactions to the stress testing of the capital adequacy ratio of Nigerian banks with international operations have seemingly slowed down the momentum.

“There is now selling momentum in the face of the index pulling back to its consolidation and ranging mood, which is a bearish sign, after forming a top reversal pattern that supports correction.’