With global recession fears, index dips further by 0.14 per cent
As the risk of an economic downturn heightens, weak sentiment persists in the equities sector of the Nigerian Exchange Limited (NGX) ,with the local bourse suffering its second consecutive weekly loss last week.
Consequently, the NGX All-share index and market capitalisation depreciated by 0.14 per cent to close the week at 51,705.61 and N27.875 trillion respectively.
Similarly, all other indices finished lower except the NGX CG, NGX Premium NGX Banking, NGX Pension, NGX Afr bank value, NGX Oil/Gas and NGX Lotus indices, appreciating by 0.86 per cent, 1.5 percent 0.33 per cent, 0.4 per cent, 0.16 per cent, 0.32 per cent and 0.55 per cent while, the NGX Asem and NGX Growth indices closed flat.
Profit-taking activities in Bua cement (-3.2 per cent), Dangote cement (-0.7 per cent), NB (-5.5 per cent), and WAPCO (-3.2 per cent), led the weekly loss. Consequently, the Month-to-Date and Year-to-Date return settled at -2.4 per cent and +21 per cent respectively.
Chief Research Office of Investdata Consulting, Ambose Omordion lamented that oil prices have continued to oscillate in the international market, trading at $109.9 per barrel, as fear of global recession lingers.
According to him, there is palpable worry that these chronic high energy prices will continue depressing the global economy, heightening inflationary pressures across the globe and fueling a weak economic outlook. He added that the concern is also influencing the monetary policies of central banks, as they move to checkmate the impacts of the Russia-Ukraine conflict on the global economy to avoid economic recession.
Omordion said Nigeria’s soaring inflation is a potent threat to its fixed income market and investment yields.
However, he predicted that the development might be an indication that there will be a reversal of funds flowing to the equities space in no distant time as institutional investors balance their portfolios.
Also, analysts at Cordros Capital said: “We expect the choppy trading pattern that played out this week to persist in the week ahead, as investors continue to cherry-pick stocks with attractive dividend yields, and at the same time remain cautious about leaving gains in the market.
“Notwithstanding, we advise investors to take positions in only blue-chip stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”
Vetiva Dealing and Brokerage also said: “This week’s trading pattern was mixed as we saw days of declines followed by positive activity.
“We anticipate a similar trade pattern next week with minimal activity as investors continue to cherry-pick attractive counters across the board.”
Further breakdown of last week’s transactions showed that a total turnover of 1.1 billion shares worth N13.7 billion was recorded in 22,350 deals by investors on the floor of the exchange.
This volume of shares traded was, however, lower than a total of 940.9 million units valued at N11.5 billion that was exchanged in 20,077 deals as at July 17, 2022.
The financial services industry (measured by volume) led the activity chart with 806.824 million shares valued at N6.1 billion traded in 11,071 deals; thus contributing 71.9 per cent to the total equity turnover.
The oil and gas industry followed with 95.031 million shares worth N1.4 billion in 1,849 deals. The third place was the conglomerate good industry, with a turnover of 66.7 million shares worth N169.5 million in 733 deals.
Trading in the top three equities namely FCMB Group Plc, United Bank for Africa Plc and Oando Plc (measured by volume) accounted for 407.7 million shares worth N2 billion in 2,181 deals, contributing 36.4 per cent to the total equities’ turnover.
A total of 1,591 units of Exchange Traded Funds (ETF) valued at N10.8 million were traded last week in 18 deals compared with a total of 2,722 units valued at N1.5 million transacted last week in 10 deals.
A total of 44,746 units of bonds valued at N44.8 million were traded this week in 29 deals compared with a total of 5,972 units valued at N6 million being transacted last week. Sixteen equities appreciated during the week, higher than 13 equities in the previous week.
Fifty-six equities depreciated higher than 51 equities in the previous week while 84 equities remained unchanged lower than 92 equities recorded in the previous week.
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