Market analysts anticipate a rebound in the equities market in the near term, despite the bearish performance of last week, saying investors may take advantage of bargain hunting opportunities in the market.
According to them, weak- ening share prices in the past two months in stocks with sound fundamentals may provide attractive entry op- portunities for investors.
The local bourse’s performance has been on a downtrend in the past two months as the market went into correction after rally in the first two months of the year.
Most analysts have pre- dicted an end to the current correction, but the market defied all predictions as good corporate earnings fail to lift it up.
A review of last week indicates that the market recorded a bearish performance as sustained profit taking in market bellwethers dragged the benchmark index on four of five trading sessions.
The NSEASI slid 0.5 percent week on week (w-o-w) to settle at 41,022.31 points while year-to-date (YTD) return weakened to 7.3 percent. Correspondingly, stocks lost N71.1 billion in value as market capitalisation fell to N14.86 trillion. The negative performance in the week was largely attributable to profit taking in bellwethers – DANGCEM (-0.2%), NIGERIAN BREWERIES (-3.5%) and GUARANTY (-2.3%). Moreover, activ- ity level weakened as average volume and value traded dipped 4.7 percent and 0.2 percent to 317.1 million units and N5.2 billion respectively. The top traded stocks by volume were FCMB (310.0m), GUARANTY (246.2m) and ZENITH (136.3m) while GUARANTY (N11.2bn), ZENITH (N3.7bn) and FCMB (N777.3m) were the week’s top traded stocks by value.
Specifically, the trading week started on a negative note, reversing gains from the preceding Friday as the ASI shed 11bps following losses in GUARANTY, ZENITH, and NIGERIAN BREWERIES. The bearish performance was sustained in four consecutive trading sessions with the benchmark index slid- ing 4bps, 18bps and 40bps on Tuesday, Wednesday and Thursday respectively on the back of continued sell-offs in DANGCEM, NIGERIAN BREWERIES, FORTE, GUARANTY, UNILEVER, and SE- PLAT.
However, the trend was bucked on Friday as the ASI rose 26bps.
Sector performance was mixed as three of five indices closed in the green. The consumer and industrial goods indices trended southwards w-o-w, down 1.9 percent and 2bps respectively, due to sell-offs in NIGERIAN BREWERIES (-3.5%) and DANGCEM (-0.2%).
On the flipside, the insurance index rose 0.8 percent w-o-w on the back of gains in LINKASSURE (+11.8%) and MANSARD (+4.7%). Follow- ing closely were the banking and oil & gas indices, which inched 0.5 percent and 0.1 percent higher w-o-w as a result of bargain hunting in ZENITH (+5.1%), FIDELITY (+4.1%) and ETERNA (+20.7%).
Investor sentiment measured by market breadth (advance/decline ratio) weakened to 0.7x from 1.1x recorded in the prior week as 35 stocks advanced against 49 stocks that declined. On the other hand, 85 equities remained unchanged lower than 100 equities recorded in the preceding week.
The top performing stocks this week were CCNN (+29.8%), ETERNA (+20.7%) and LINKASSURE (+11.8%) while NIGERINS (-14.3%), JAPAULOIL (-13.0%) and UACPROP (-12.6%) were the worst performing stocks.
In the week, a total turn- over of 1.586 billion shares worth N25.992 billion in 21,115 deals were traded on the floor of the Exchange in
contrast to a total of 1.331 billion shares valued at N20.835 billion that exchanged hands in the previous week in 18,695 deals.
The financial services industry (measured by volume) led the activity chart with 1.360 billion shares valued at N20.378 billion traded in 11,936 deals; thus contributing 85.80 percent and 78.40 percent to the total equity turnover volume and value respectively.
The consumer goods in- dustry followed with 52.727 million shares worth N2.125 billion in 3,301 deals. The third place was occupied by oil and gas industry with a turnover of 50.092 million shares worth N783.716 million in 2,153 deals.
Trading in the top three equities namely – FCMB Plc., Guaranty Trust Bank Plc. and Zenith Bank Plc. (measured by volume) accounted for 745. 049 million shares worth N17.507 billion in 2,757 deals, contributing 46.69 percent and 67.36 percent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 444,190 units of exchange-traded products (ETPs) valued at N2.514 million executed in 11 deals, compared with a total of 709,058 units valued at N3.845 million that was transacted in the week in 10 deals.
A total of 7,647 units of Federal Government bonds valued at N8.047 million were traded during the week in 30 deals, compared with a total of 80,152 units valued at N82.543 million transacted last week in 14 deals.