Political concerns sustain hold on market indices
Political concerns ahead of the 2019 elections have continued to depress transactions on the trading floor of the Nigerian Stock Exchange (NSE), as the All-Share Index and market capitalisation depreciated by 0.4 per cent, closing the week at 32,058.28 points and N11.704 trillion respectively.
Similarly, all other indices finished lower, except the NSE Consumer Goods and NSE Industrial Goods indices that moved higher by 0.04 per cent and 1.02 per cent respectively, while NSE ASeM Index closed flat.
Also, a turnover of 1.285 billion shares worth N11.539 billion was recorded on the floor of the Exchange, in contrast with 1.079 billion shares valued at N18.196 billion that were exchanged in 14,372 deals during the preceding week.
The financial services industry (measured by volume), led the activity chart with 890.433 million shares, valued at N8.113 billion and traded in 7,923 deals, thus contributing 69.31 per cent to the total equity turnover volume.
The services industry followed with 284.370 million shares worth N585.368 million in 298 deals, while the consumer goods industry took the third place with a turnover of 44.694 million shares worth N 2.054 billion in 2,367 deals.
Trading in the top three equities, namely, Diamond Bank Plc, Ikeja Hotel Plc and FBN Holdings Plc (measured by volume), accounted for 708.003 million shares worth N1.758 billion in 1,957 deals, contributing 55.11 per cent and 15.23 per cent to the total equity turnover volume and value respectively.
Also, 24 equities appreciated in price during the week, lower than 27 in the previous week, as 36 others depreciated in price, lower than 39 of the previous week, while 109 equities remained unchanged, higher than 103 recorded in the preceding week.
Analysts at Cordros Capital said: “Again, we reiterate our negative outlook for the equities market in the short to medium term, amid growing political concerns ahead of 2019 elections and absence of a positive market trigger. However, positive macroeconomic fundamentals remain supportive of recovery in the long term.”
Afrinvest Securities Limited said: “Despite the overall negative performance this week, we noticed increased buying activity in bellwethers and we expect this trend to be sustained in the coming week, as investors seek to lock-in on the current attractive pricing in the market. Nevertheless, we expect the broad performance of the index to remain weak as investor sentiment remains pressured by developments in the polity.”
According to GTI Securities, “in the absence of any domestic or external shock that can trigger sentiment switch, we expect the overall market sentiment to remain lukewarm in coming week. However, we expect the current bargain hunting noticed majorly on bellwether banking stocks to continue in the next trading week due to their current cheap prices and huge upside potential. “