Domestic equities: 5-week bull run turns red as Zenith, MTNN, GTCO see profit-taking

BY CHARLES ABUEDE

Last week was a mixed week of trading across the NGX when the five-week bullish streak was brought to a halt as the bears came out on top due to profit-taking activities, while bellwethers such as Zenith Bank, MTN Nigeria, Guaranty Trust Company and Lafarge Cement witnessed sell-offs during the week.

It saw the benchmark index ease 0.23 percent week on week to settle at 52,979.96 points while the market year to date return moderated further to 24 percent from the 24.3 percent of previous week, and then, the market capitalization of the listed equities declined to N28.6 trillion.

In line with projections by equities analysts in the previous week, the Nigerian market eased 0.23 percent year on year, as investors digested the latest inflation data for the country with the consumer goods sector finally seeing some profit-taking action following the publication of the April 2022 inflation data by the National Bureau of Statistics (NBS) causing the index to fall 1.01 percent year on year; particularly, Flour Mills of Nigeria dipped 10.74 percent year on year to N37 per share despite the sector being a top performer on the index with a YTD return of +17.33 percent.

To start this new week, equity analysts say they are positive about it and now hold the view that their are recoveries to be made in the banking space given last week’s 124 basis points decline, while an increased investors’ appetite is anticipated to rise for stocks in the telecoms space, especially in the early days of the week as a result of the commencement of operations by their payment service banking activities in the country.

Moving on, market investors gained N63.9 billion from profit-taking activities, which further led to an improvement in the level of market activities throughout the week with a 24.3 percent and 7.2 percent increase in the average weekly volume and value traded, to 449.9 million valued at N5.8 billion. Furthermore, the close of the week saw Jaiz Bank, with 384.6 million lead the rank for the most traded security by volume through the week. This was followed by Transnational Corporation at 317.8 million and First Bank Holding at 181.4 million spurred by the announcement for the 100 percent share capital acquisition of Access Bank’s subsidiary, Access Pensions and Fund Limited, during the week.

Also, with the announcement of the receipt of full approval from industry regulators to roll out its payment service bank business in Nigeria, MTN Nigeria emerged as the most traded stock by value during the week due to strong buying interest in its stock. Then, with Seplat Energy, appointing a new board chairman, and non-executive director to the company’s board, while Orjiako got off the board as chairman to allow the company carry on, it ended in the top traded stocks by value with N2.8 billion.

Across the various sectors performance varied as the banking index led the table for the decliners during the week, down 1.2 percent as a result of sell-offs in Fidelity Bank, and Zenith Bank, while the consumer and industrial goods indexes tanked one percent and 0.6 percent respectively, on account of price fall in Champion Breweries, Flour Mills of Nigeria and Lafarge Cement.

Also, the insurance sector led the major gainers’ table with 3.6 percent gains due to buying interests in NEM Insurance and Coronation Insurance, with 11.2 percent; and the oil and gas sector and technology segments advanced 0.3 percent and 0.1 percent respectively, on the back of price increase in MRS Oil, Oando Plc and Airtel Africa after the company reported an impressive earning for the just-concluded operating period.

Furthermore, the investor sentiment, as measured by the market breadth, waned from 0.2x to 0.1X from last week with 35 stocks making positive headways while 40 and 76 lost and closed unchanged week on week, respectively. Major advancers for the week include McNichols Food Processing Company, Transcorp Hotels and Northern Nigeria Flour Mills, while the likes of Royal Exchange Assurance Company, Academy Press Limited and FTN Cocoa Processors Company led the chart for the decliners through the week.

At the close of the week, the NGX 30 Index decreased by 1.47 percent to close at 2,030.37 points as against 2,060.70 points at the previous week’s close. Market turnover closed with a traded volume of 71.54 million units. International Breweries and UBN were the key gainers, while MTNN and Custodian were the key losers.