Profit-taking triggers equities’ sell-off, indices slump
Intense profit-taking in the equities market, which triggered selloffs since the previous week, persisted till the close of transactions last week.
The development caused the All-Share Index (ASI) and market capitalisation to depreciate by 1.19 per cent to close the week at 26,536.21 points and N12.81 trillion respectively.
All other indices finished lower with the exception of NSE Pension, NSE Insurance, NSE-AFR Div Yield, NSE MERI Value and NSE Oil and Gas indices, which appreciated by 0.02 per cent, 0.03 per cent, 2.09 per cent and 2.06 per cent and 0.03 per cent respectively.
Analysts said the slowdown would remain mixed, even as investors take advantage of the pullback and low supply to position, ahead of the usual Santa Claus and year-end rally, as capital flow and repositioning in value stocks continue.
Specifically, the Chief Research Officer of Investdata Consulting Limited, Ambrose Omodion, said: “There is also the changing sentiment in the expectation of improved liquidity and positive economic indices.
“Again, the current undervalued state of the market offers investors opportunities to position for short and medium-to-long-term horizons.
“We expect that investors would target fundamentally sound and dividend-paying stocks for possible capital appreciation as the year draws down to usher in 2020,
“Also, traders and investors need to change their strategies owing to NSE’s pricing methodology, CBN directives and its impact on the economy in the nearest future.”
Analysts at Codros Capital said: “In our view, given the risk-off sentiment dominating the domestic market, we expect the market to shed points in the coming week, except we see a policy-driven catalyst.
“Nevertheless, valuations remain attractive, hence we expect pockets of gains over the final weeks of the year as fund and portfolio managers realign portfolios prior to the start of 2020.”
Last week, a turnover of 1.044 billion shares worth N14.628 billion was recorded in 14,974 deals by investors on the floor of the exchange in contrast with 952.697 million shares valued at N12.774 billion that changed hands in 17,279 deals during the previous week.
The financial services industry (measured by volume) led the activity chart with 556.905 million shares valued at N5.678 billion traded in 8,267 deals; thus contributing 53.33 per cent and 38.81 per cent to the total equity turnover volume and value respectively.
The healthcare industry followed with 215.030 million shares worth N122.603 million in 412 deals.
The third place was conglomerates sector, with a turnover of 89.601 million shares worth N466.294 million in 874 deals.
Trading in the top three equities namely, Union Diagnostics and Clinical Services Plc, United Bank for Africa Plc and Guaranty Trust Bank Plc (measured by volume) accounted for 379.095 million shares worth N3.066 billion in 1,704 deals, contributing 36.30 per cent and 20.96 per cent to the total equity turnover volume and value respectively.
A total of 7,300 units of Federal Government Bonds valued at N8.073 million were traded this week in four deals, compared with a total of 27,096 units valued at N27.630 million transacted last week in 25 deals.
Also, 18 equities appreciated in price during the week, lower than 19 equities in the previous week and 44 others depreciated in price, higher than 35 equities in the previous week, while 103 equities remained unchanged, lower than 111 equities recorded in the previous week.