Investors’ wealth rise marginally by 0.5% amid slow recovery, rising pandemic

Slow economic recovery, threatened by the rising cases of the COVID-19 disease, and persistent foreign exchange (Forex) illiquidity have continued to trigger weak sentiments at the equities sector of the Nigerian Stock Exchange (NSE).

Although the market closed the week upbeat with the All-share index and market capitalisation appreciating by 0.58%, analysts insisted that the valuation already suggests a bearish market and gloomy outlook.

According to them, risks remain on the horizon due to a combination of the increasing number of COVID-19 cases in Nigeria, and the weak state of the economy.

For instance, analysts at Investdata Consulting Limited, said: “Investors are equally worried about inconsistent government policies, which have continued to dampen confidence.

“This is likely to support the wave of decline as pullbacks persist, just as economic recovery is threatened by the rising cases of the COVID-19 pandemic.

“For immediate liquidity or cash, we advise that you trade low priced stocks with serious caution to avoid being trapped.”However, they expressed optimism that the market’s high dividend yield continues to attract buying interests, noting that investors are buying to increase their positions in undervalued stocks ahead of Q2 numbers.

Similarly, analysts at Codros Capital said: “Our view continues to favour cautious trading owing to the fact the gains recorded this week were not broad-based.

“We reiterate that risks remain on the horizon due to a combination of the increasing number of COVID-19 cases in Nigeria, and weak economic conditions.
“Thus, we continue to advise investors to seek trading opportunities in only fundamentally justified stocks.”

Afrinvest Research, said: “In the coming week, we expect more corporate earnings releases to dictate the performance of the market.”A breakdown of market performance last week showed that the equities market reopened bearish on Monday, occasioned by losses in most blue-chip stocks, especially Neimeth International, and Cutix as market capitalisation lost N10 billion.

At the close of transactions, the All-Share Index (ASI) also slipped by 18.08 absolute points or 0.07 per cent to close at 24,269.58 points. Similarly, the overall market capitalisation shed N10 billion to close at N12.660 trillion.

The downturn was impacted by losses recorded in large and medium capital stocks, including Cutix, Neimeth International Pharmaceuticals, Zenith Bank, Ecobank Transnational Incorporated (ETI), and Access Bank.

Following continued price losses suffered by most blue-chip stocks, sentiments remained weak on the NSE on Tuesday, as the All-Share Index fell by 0.39 per cent and dipped by 95.13 absolute points to close at 24,174.45 points. Similarly, the overall market capitalisation shed N49 billion to close at N12.611 trillion.

Despite the downtrend in the market in the first two trading days of the week, capital market analysts expected the continued release of half-year results to spur reactions in the market, as investors strive to take profitable positions.

The downturn was impacted by losses recorded in large and medium capital stocks, including Dangote Cement, Chemical and Allied Products (CAP), International Breweries, Eterna Oil, and Cutix.

The equities sector sustained a sliding profile at the end of Wednesday’s transactions, as more blue-chip stocks, especially GSK, African Prudential, and others joined the league of losers, resulting in a further slide in market capitalisation by N1 billion.

At the close of trading Wednesday, at the NSE, the All-Share Index fell by 0.92 absolute points, about 0.004 per cent down to close at 24,173.53 points. Similarly, the overall market capitalisation shed N1 billion to close at N12.610 trillion.

The marginal downturn witnessed in the market was as a result of price depreciation in the shares of GlaxoSmithKline (GSK) Consumer Nigeria, Africa Prudential, Caverton Offshore Support Group, Sterling Bank, and Consolidated Hallmark Insurance.

After days of downturn, gains in bellwethers buoyed transactions on the equities sector of the Nigerian Stock Exchange (NSE), as market capitalisation advanced by N177 billion on Thursday.

Specifically, at the close of trading, Thursday, the All Share Index (ASI) increased by 338.74 absolute points or 1.40 per cent to close at 24,512.27 points. Similarly, the market capitalisation gained N177 billion to close at N12.787 trillion.

The upturn was impacted by gains recorded in medium and large capital stocks, including Dangote Cement, MTN Nigeria Communications, Custodian Investment, Africa Prudential, and FBN Holdings (FBNH).

Further analysis of last week transactions indicated that a turnover of 1.350 billion shares worth N14.433 billion was recorded in 16,723 deals by investors on the floor of the Exchange, in contrast to a total of 1.016 billion shares valued at N7.436 billion that was exchanged in 18,092 deals during the preceding week.

The financial services industry (measured by volume) led the activity chart with 847.677 million shares valued at N5.649 billion traded in 9,068 deals; thus contributing 62.77 per cent to the total equity turnover volume.

The conglomerates industry followed with 176.425 million shares worth N821.337 million in 400 deals. The third place was the consumer goods industry, with a turnover of 158.022 million shares worth N3.768 billion in 2,563 deals.

Trading in top three equities, namely, FBN Holdings Plc, UACN Plc and United Bank for Africa Plc. (measured by volume) accounted for 434.502 million shares worth N2.408 billion, traded in 2,270 deals, contributing 32.18 per cent to the total equity turnover volume.