Industrial goods, insurance plummet as oil index gains 1.2%

Following price depreciation in BUA Cement, UPDC and Caverton, the industrial goods sector led the losers’ chart at the end of last week’s transactions on the equities sector of the Nigerian Exchange Limited (NGX) with 3.7 per cent.

The insurance goods sector trailed with a loss of 0.40 per cent, driven by a sell-off in Regency Alliance and Royal Exchange Assurance. The consumer goods index also dipped by 0.22 per cent owing to losses in Cadbury, Honeywell Flourmills and MCNICHOLS.

In contrast, the NGX oil and gas sector emerged as the week’s highest price gainer, adding 1.2 per cent week-on-week despite continued sell pressure in Aradel. The positive performance in this sector was largely buoyed by positive sentiment in Conoil and Eterna.

Also, the NGX-Banking index posted modest gains of 0.2 per cent week-on-week, driven by price movements in GTCO, Zenith and Fidelity Bank.
Recall that the industrial goods sector fell by 9.21 per cent in October, attributable to profit taking on Dangote Cement which fell by 10 per cent.

Aside from Dangote Cement, BUA Cement’s third quarter (Q3’) was not impressive, as the financials showed declining profit compared to its prior year’s performance, causing a market selloff on the stock.

Consumer goods stocks also recorded a decline of 0.6 per cent as the Q3’2024 of most companies in the sector showed rising losses in their post-tax profit, due to FX losses from Naira devaluation. For instance, Nestle, Guinness, Nigerian Breweries, International Breweries, Cadbury and Dangote Sugar recorded losses.
On the price movement chart, the all-share index and market capitalisation depreciated by 2.03 per cent to close the week at 97,432.02 and N59.039 trillion respectively, amid sell pressures on BUA Cement (-11.1 per cent), MTNN (-4.9 per cent), FBNH (-6.1 per cent), and Aradel (-25.7 per cent).

Accordingly, the Month-to-Date (MTD) and Year-to-Date (YTD) returns stood at -0.2 per cent and +30.3 per cent respectively.

On the activity chart, a turnover of 2.7 billion shares worth N54.6 billion was recorded in 46,848 deals by investors on the floor of the exchange, in contrast to a total of 2.1 billion units valued at N85.9 billion that was exchanged in 41,217 deals on October 25, 2024.

The financial services industry (measured by volume) led the activity chart with 1.8 billion shares valued at N28.9 billion traded in 20,173 deals, thus contributing 67 per cent to the total equity turnover volume.

The ICT industry followed with 389.8 million shares worth N6.6 billion in 2,515 deals. The conglomerate industry ranked third with a turnover of 160.9 million shares worth N4.7 billion in 3,623 deals.

Trading in the top three equities namely Fidelity Bank Plc, Chams Holding Company Plc and United Bank for Africa (UBA) Plc (measured by volume) accounted for 1.2 billion shares worth N17.7 billion in 4,912 deals, contributing 45.1 per cent to the total equity turnover.

Analysts at Codros Capital said: “Next week, we expect choppy trading activities as investors rebalance their portfolios based on the assessment of the Q3 corporate earnings reports released thus far.”

Cowry Asset Management Limited said: “Looking ahead, the market is likely to remain volatile in the near term considering the cautious sentiments of investors. However, positive developments, such as improved corporate earnings or stabilising macroeconomic conditions, could help bolster investor confidence and drive recovery.”