NGX defies impressive corporate actions as indices tank

•Investors stake N51b in equities in one week

Despite anticipations of interim dividend for the second quarter financials scorecards, four, out of five indices closed lower at the end of last week’s transactions on the equities sector of the Nigerian Exchange Limited (NGX).

The four indices are insurance, consumer goods, Industrial goods and banking index. The insurance index dipped by 4.5 per cent, occasioned by a selloff in Cornerstone and AIICO insurance while price depreciation in RT Briscoe and PZ Cussons spurred the consumer goods index 1.2 per cent loss.

Also, the decline of 0.2 per cent and 0.1 per cent in the industrial goods and banking indices were driven by losses in Dangote Sugar and Nigerian Breweries.
On the other hand, only one index which is the oil and gas index gained 1.5 per cent following bargain hunting in Oando and Eterna Plc.

Consequently, a turnover of 2.1 billion shares worth N51 billion was recorded in 55,603 deals by investors on the floor of the exchange, in contrast to 2.8 billion units, valued at N53 billion which was exchanged in 50,488 deals on August 30, 2024.

The financial services industry (measured by volume) led the activity chart with 1.2 billion shares valued at N19 billion traded in 20,701 deals, thus contributing 57.4 per cent to the total equity turnover volume.

The oil and gas industry followed with 262 million shares worth N17 billion in 14,275 deals. The services industry ranked third, with a turnover of 155 million shares worth N532 million in 3,558 deals.

Trading in the top three equities namely Access Holdings Plc, Oando Plc and Zenith Bank Plc (measured by volume) accounted for 517.336 million shares worth N24.454 billion in 15,502 deals, contributing 24 to the total equity turnover volume.

On the price movement chart, the Nigerian equities market could not sustain the previous week’s bullish momentum as profit-taking activities in Dangote Sugar (-5.5 per cent), Zenith Bank (-2 per cent) and WAPCO (-3.5 per cent) caused the NGX All-Share Index and market capitalisation to depreciate by 0.2 per cent to close the week at 96,433.53 and N55.394 trillion respectively.

Analysts at Cowry Asset Management said: “In the coming week, (this week), we expect mixed sentiment to rule the market activities with position-taking and portfolio reshuffling likely to intensify as market players await the half-year publication of interim dividend-paying banks.

“From a technical perspective, the NGX is showing signs of recovery, as indicated by the indicators, with equity investors poised to capitalise on pullbacks to acquire value stocks. Nevertheless, we continued to advise investors to focus on fundamentally sound stocks.”

Cordros Capital said: “We anticipate a mix of cautious trading and selective buying as market participants watch out for any signs of broader market interest. However, we acknowledge the likelihood of profit-taking activities on stocks that have experienced notable appreciation in recent weeks.”

A total of 23,881 units of Exchange Traded Products (ETPs) valued at N8.2 million were traded this week in 136 deals compared with a total of 37,329 units valued at N8.4 million transacted last week in 212 deals.

Also, a total of 21,002 units of bonds valued at N19 million were traded last week in 24 deals compared with a total of 88,071 units valued at N75.3 million transacted in 37 deals during the preceding week.