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Mixed earnings reports, as indices rise by 1.8 per cent

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The first quarter earnings, expected to serve as a catalyst for the market growth after the post-election decline, kicked off last week, with most companies presenting a mixed performance.The contraction in earnings of the companies, reflected the weak economic fundamentals and activities in the country during the first quarter of 2019, mainly driven by election concerns.
 
At the end of transactions last week, the NSE All-Share Index and market capitalisation appreciated by 1.8 per cent to close the week at 30,086.31 points and N11.3 trillion respectively. Similarly, all other indices finished higher with the exception of the NSE Oil/Gas Index that depreciated by 2.12 per cent.
 
But analysts have argued that the uptrend is yet to be a confirmation of recovery wave, as volume traded remains relatively low, adding that the weak economic and market fundamentals affected businesses, given the results released so far. 

 
Only fewer companies managed to post a positive bottom line on the strength of foreign exchange gains, and drop in loan loss provisions that boosted their profit levels, among others.Analysts at Investdata Consulting Limited said: “We expect investors to look at government’s policy direction as the market faces low liquidity problems in the ongoing earnings reporting season, vis-à-vis market and economic fundamentals.
 
“Given the drop in the prices of major blue chips in recent times, creating entry opportunities, we expect speculative trading to shape the market direction going forward.”The market opened for four trading days this week as the federal government declared April 19, 2019, a public holiday to mark the end of the Lenten period.
 
Meanwhile, a turnover of 988.692 million shares worth N11.432. billion was recorded in 13,596 deals by investors on the floor of the exchange in contrast to a total of 1.770 billion shares valued at N15.264 billion that was exchanged last week in 17,015 deals during the preceding week.
 
The financial services industry (measured by volume) led the activity chart with 766.191 million shares valued at N7.261 billion traded in 7,820 deals; thus contributing 77.50 per cent to the total equity turnover volume.The ICT industry followed with 74.769 million shares worth N24.600 million in 212 deals. The third place was consumer goods industry with a turnover of 48.022 million shares worth N3.095 billion in 2,374 deals.

Trading in the top three equities, namely, Union Bank of Nigeria Plc, Access Bank Plc and Guaranty Trust Bank Plc (measured by volume), accounted for 355.043 million shares worth N4.845 billion in 2,133 deals, contributing 35.91per cent to the total equity turnover volume.

Also, 33 equities appreciated in price during the week, lower than 35 in the previous week. 33 equities depreciated in price, higher than 31 equities of the previous week, while 101 equities remained unchanged, the same with 101 equities recorded in the preceding week.


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