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Profit-taking costs market 0.57 per cent loss

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Nigerian Exchange Group (NGX)


Profit-taking resurfaced on the Nigerian Exchange Limited (NGX) on Thursday, halting three successive sessions of bulls run as investors booked profits after the recent rally.

Consequently, the NGX All-Share Index (ASI) and market capitalisation depreciated by 0.57 per cent and 0.62 per cent to close the week at 37,994.19 and N19.796 trillion respectively.

Other indices finished higher except NGX All-Share, NGX-main board, NGX consumer goods and NGX Lotus II indices which depreciated by 0.57 per cent, 2.22 per cent, 0.32 per cent and 0.23 per cent respectively, while the NGX ASeM and NGX Growth Indices closed flat.

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Last week, a turnover of 1.348 billion shares worth N12.14 billion was recorded in 21,581 deals by investors on the floor of the exchange, in contrast to a total of 1.021 billion units valued at N14.145 billion that exchanged hands in 17,565 deals during the preceding week.

The financial services industry led the activity chart with 892.212 million shares valued at N7.065 billion traded in 11,592 deals; thus contributing 66.2 per cent to the total equity turnover volume.

The ICT Industry followed with 110.067 million shares worth N776.402 million in 744 deals. The third place was the conglomerate industry, with a turnover of 100.008 million shares worth N216.504 million in 788 deals.

Trading in the top three equities namely Fidelity Bank Plc, FBN Holdings Plc and Zenith Bank Plc (measured by volume) accounted for 310.779 million shares worth N3.166 billion in 3,289 deals, contributing 23.06 per cent to the total equity turnover.

Analysts said the slowdown in momentum has created opportunities for discerning investors to reposition in interim dividend-paying stocks, ahead of the earnings season.

They argued that there are sectors that are economically vibrant which investors are expected to realign their positioning despite, slow and weak economic recovery and rising insecurity that had made prices of goods and services exorbitant in the market.

Specifically, Investdata Consulting Limited said: “There is no need to panic at this point because profit taking is an integral part of stock market dynamics anytime. It drives oscillation that creates room for entry and exit.

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“So Investors and traders should not be carried away with any rally or rebound, but be guided by their investment objectives, while taking profit immediately reasonable profit targets are met.”

Vetiva Dealings and Brokerage firm said: “We expect next week’s activity to follow the same pattern observed in the last few sessions, with sell-offs followed by price appreciation.

“We anticipate a mixed activity level in the market with the banking sector likely to dominate trading once more. Finally, with a few Q2 results expected in the coming week (this week), this will also shape market outcomes in the new week.”

A review of last week’s market performance showed increasing appetite for interim dividend paying stocks propel transactions across all sectors on the NGX, as investors wealth soared by N147 billion in three trading days.

The market capitalisation which stood at N19.923 trillion when the market reopened for trading on Monday, rose by N147 billion to close at N20.070 trillion yesterday.

In the same vein, the ASI, which measures the performance of listed equities also appreciated by 281.3 points or 0.7per cent to 38,501.31 from 38,220.01 at which it opened on Monday.

The market upturn was driven by price appreciation in large and medium capitalised stocks amongst which are; Guaranty Trust Bank Holding Company, Dangote Sugar Refinery, Lafarge, Cutix and Custodian Investment.

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However, following profit taking in most blue-chip stocks, especially Prestige Assurance and Pharma-Deko, the Nigerian Exchange Limited (NGX) reversed gaining streak to close on a downturn Thursday, causing the All-Share Index (ASI) to decline by 0.08 per cent.

The ASI declined by 31.44 points, representing a loss of 0.08 per cent to close at 38,469.87 points. Similarly, the market capitalisation shed N27 billion, representing a decrease of 0.13 per cent to close at N20.043 trillion.

The market downturn was driven by price depreciation in large and medium capitalised stocks amongst which are; NASCON Allied Industries, Guaranty Trust Bank Holding Company, Access Bank, Stanbic IBTC Holdings and United Bank for Africa (UBA).

Last week, a total of 34,123 units of Exchange Traded Products valued at N784,264.64 were traded this week in 13 deals compared with a total of 13,050 units valued at N930,262.30 transacted last week in 17 deals.

Also, 147,590 units of bonds valued at N173.172 million were traded last week in 15 deals compared with a total of 61,298 units valued at N61.267 million transacted in 26 deals during the preceding week.

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