Stock market closes first trading week bearish as index dips by 0.37%

The local bourse ended the first trading week of 2021 on a bearish note, as losses recorded on the second and last trading days eroded gains from the other trading sessions. The All-Share Index (ASI) and market capitalisation depreciated by 0.37 per cent to close the week at 40,120.22 and N20.978 trillion respectively.

However, all other indices finished higher with the exception of Nigerian Stock Exchange (NSE) Premium, NSE Lotus II and NSE industrial goods which depreciated by 2.99 per cent, 1.22 per cent and 2.29 per cent respectively while the NSE ASeM and NSE Growth Indices closed flat.

However, analysts expressed optimism that positioning for the full year 2020 dividends would continue to support positive sentiment amid negative real returns in the fixed income market.

Analysts at Vertiva Dealing and Brokerage firms said: “In spite of the dominance of the bulls for most of the sessions during the week (evidenced by gains in three of the five trading sessions, and bullish sectroral performances), the index ended the week lower amidst significant declines in the Industrial goods sector.

“We expect a recovery in the coming week, as the current price drop in the Industrial goods sector is expected to drive some buying interest in that region. Also, we anticipate some more positive patronage in the oil and gas sector as we continue to see improvement in the prices of crude oil,” they said.

Analysts at Codros Capital said: “We do not rule out intermittent profit-taking. However, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.”

A look at the market performance last week showed that transactions on the equity sector of the NSE reopened the year on a positive note on Monday, as market capitalisation appreciated by N458 billion.

At the close of trading, ASI increased by 876.67 absolute points, representing a growth of 2.18 per cent to close at 41,147.39 points. Similarly, the market capitalisation gained N458 billion to close at N21.515 trillion.

The positive performance was triggered by gains recorded in medium and large capitalised stocks, including BUA Cement, Lafarge Africa, Guaranty Trust Bank, Flour Mills of Nigeria and Dangote Sugar Refinery.

Following renewed profit-taking, the stock market reversed gains to close on a downturn on Tuesday, as the ASI depreciated 1.83 per cent. On Tuesday, the ASI declined by 751.25 absolute points, representing a loss of 1.83 per cent to close at 40,396.14 points.

Accordingly, investors lost N393 billion in value as market capitalisation went down to N21.122 trillion. The downturn was triggered by losses recorded in medium and large capitalised stocks, amongst which are; BUA Cement, MTN Nigeria Communications (MTNN), Zenith Bank, Okomu Oil and Guaranty Trust Bank.

The Nigerian stock market rebounded on Wednesday after the previous day’s negative performance, as market capitalisation increased by N24 billion.

The ASI gained 69.01 absolute points, representing a gain of 0.17 per cent to close at 40,465.15 points. Similarly, the overall market capitalisation value appreciated by N24 billion to close at N21.158 trillion.

Following gains recorded by most blue chip stocks, especially Seplat and FTN Cocoa, transactions on the NSE extended gain to two consecutive sessions on Thursday, causing market capitalisation to appreciate further by N66 billion.

The ASI gained 125.70 absolute points, representing a growth of 0.31 per cent to close at 40,590.85 points. Similarly, the overall market capitalisation value increased by N66 billion to close at N21.224 trillion.
The uptrend was also driven by price appreciation in medium and large capitalised stocks, including SEPLAT, Nigerian Breweries, Ardova Plc, Dangote Sugar Refinery and Guaranty Trust Bank.

Further analysis of last week’s trading indicated that a turnover of 3.394 billion shares worth N19.867 billion was recorded in 26,808 deals by investors on the floor of the exchange, in contrast to a total of 1.806 billion units valued at N25.966 billion that changed hands in 14,634 deals during the preceding week.

The consumer goods industry (measured by volume) led the activity chart with 2.026 billion shares valued at N7.503 billion traded in 4,031 deals; thus contributing 59.70 per cent and 37.77 per cent to the total equity turnover volume and value respectively.

The financial services industry followed with 939.288 million shares worth N7.820 billion in 14,020 deals. The third place conglomerates industry ranked third with a turnover of 139.882 million shares worth N182.151 million in 885 deals.

Trading in the top three equities namely Champion Breweries Plc, Transnational Corporation of Nigeria Plc and Access Bank Plc (measured by volume) accounted for 2.144 billion shares worth N6.002 billion in 1,971 deals, contributing 63.18 per cent to the total equity turnover volume and value.

Fifty equities appreciated during the week, higher than 32 equities in equities during the preceding g week. 21 equities depreciated in price, lower than 32 equities in the previous week, while 90 equities remained unchanged, lower than 97 recorded in the previous week.