UBA, others lift NGX turnover by N75.7 billion

Heavy transactions in the shares of some banks and insurance companies, especially Sovereign Trust Insurance and United Bank for Africa (UBA), last week, lifted the volume of shares trades as a turnover of 6.5 billion shares worth N75.7 billion was recorded.

This volume of shares traded was higher than a total of 2.7 billion units, valued at N54.6 billion that changed hands in 46,848 deals the previous week. The financial services industry (measured by volume) led the activity chart with 5.7 billion shares valued at N44.3 billion traded in 23,268 deals, contributing 87.6 per cent to the total equity turnover volume.

The oil and gas industry followed with 245.7 million shares worth N15.9 billion in 9,057 deals. The agriculture industry ranked third with a turnover of 216.4 million shares worth N1.1 billion in 1,653 deals.

Trading in the top three equities – Sovereign Trust Insurance Plc, Consolidated Hallmark Holdings Plc (CHI) and United Bank for Africa Plc (measured by volume) – accounted for 3.839 billion shares worth N20.9 billion in 5,652 deals, contributing 59.4 per cent to the total equity turnover.

On the price movement chart, despite gains in three of the five trading sessions, sell pressures on Oando (-22 per cent), MTNN (-3.4 per cent), and TRANSCORP (-4 per cent) outweighed gains, causing the NGX all-share index and market capitalisation to depreciate by 0.2 per cent to close the week at 97,236.19 and N58.92 trillion respectively.

All other indices finished higher except NGX Main Board, NGX 30, NGX Lotus II and NGX Industrial Goods which depreciated by 0.48 per cent, 0.17 per cent, 0.08 per cent, and 0.02 per cent respectively.

The development caused the month-to-date and year-to-date returns to settle at -0.4 per cent and +30 per cent. Analysts at Cordros Capital said: “We anticipate mixed sentiments in the week ahead with investors focusing on recent bank earnings releases. In the medium term, we expect investors’ sentiments to be shaped by developments in the macroeconomic landscape and the movement of yields in the fixed-income market.”

Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion, said: “We expect mixed sentiment and recovery to continue on low valuation, profit taking and positioning. Also, sector rotation and portfolio rebalancing continue in the market, with investors taking advantage of pullbacks to buy into value.

“This is amid the volatility and pullbacks that add more strength to upside potential. Consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.”

Cowry Research said: “Looking ahead to the coming week, mixed sentiment is expected to persist as portfolio rebalancing continues. Despite the recent downturn, a near-term rebound is anticipated, although investor sentiment is expected to remain cautious. ”

A total of 41,335 units of Exchange Traded Products (ETPS)valued at N19.9 million were traded this week in 115 deals compared with a total of 74,599 units valued at N35.05 million transacted last week in 87 deals.

In addition, 171,066 units of bonds, valued at N159.6 million were traded this week in 41 deals compared with a total of 72,119 units valued at N63.735 million transacted last week in 28 deals. 31 equities appreciated during the week lower than 39 equities in the previous week. Forty-two equities depreciated lower than 45 in the previous week, while 79 equities remained unchanged, higher than 68 recorded in the previous week.

Meanwhile, at the foreign exchange (FX) market, the naira depreciated this week by 0.7 per cent w/w to N1,678.87/dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) despite the CBN’s intervention, selling c. $51.00 million to authorized dealers.

Notably, the country’s FX reserves crossed the $40 billion mark for the first time in 35 months growing by $270.1 million w/w to 240.04 billion (as of 6 November).

Total turnover at the NAFEM (as of 7 November) decreased by 12.8 per cent WTD to $814.11 million, with trades consummated within the N1,591.60/$– N1,700/USD band. In the forwards market, the naira rates decreased across one month (-0.9 per cent to N1,714.79/dollar).