NGX Sheds N633bn as Risk Off Sentiment Persists
Equities investors lost about N633 billion in two days trading session due to risk off sentiment that continue to provoke rapid shareholding sell down in the local bourse. The market closed negative for another week due to a shift away from bargain hunting. The bearish pattern has persisted for weeks now., dragging Nigerian bourse market capitalisation downward.
In the just concluded week, the benchmark index fell by 1.09% due to a low-traded volume, weak transactions value as investors offload their equities holding. This happened despite the influx of strong earnings performance by top banks.
The market’s pullback was attributed to mixed corporate earnings and economic headwinds, compounded by anticipation surrounding the publication of consumer price inflation data for March.
Overall, equity investors lost a total of N632.95 billion from the two sessions while the year to date return of the market printed at 36.83%.
Trading activity this week was downbeat with weak market breadth as evidenced in the total number of losers that outnumbered the gainers in the ratio 39:19.
Cowry Asset Management Limited said in its market update that investors continue portfolio rebalancing activities amidst the outcome of the Friday’s treasury bills auction.
Investors are rallying around attractive yields on short term borrowing instruments in the fixed income market. As a result, the weekly traded volume printed negative by 69.24% week on week to 1.13 billion units consummated in 21,921 deals and marking a 46.17% decline during the week.
In the same manner, the traded value for the week plummeted further by 50.51% week on week to N28.65 billion, according to data from the local bourse.
On the sectoral performance, it was a market-wide bearish performance as the NGX-Banking index led the laggards by 7.22% week on week driven by adverse price movements in ZENITH, GTCO, ACCESS and FBNH.
Trailing, were the NGX-Insurance (2.45%), NGX-Consumer Goods (1.33%), NGX-Oil & Gas (0.28%), and NGX Industrial Goods Index (0.23%) which got dragged by southward movement in FLOURMILL, SUNUASSUR, DANGSUGAR, ETERNA, WAPCO and ABBEYBDS respectively.
Best performing stocks for the week included MORISON, OANDO, TRANSCORP, DEAPCAP, and OMATEK as their share prices trended upward by 21%, 11%, 10%, 10%, and 9% in that order.
However, the worst performance stocks for the week are ACCESSCORP, UCAP, GTCO, FLOURMILL, and SUNUASSUR as their share prices plummeted by 15%, 14%, 14% and 13%.
At the end of closing session, equities market capitalisation went southward in the two sessions witnessed this week by 1.08% to close at N57.86 trillion.
Cowry Asset told investors via email update that the current trend of corrections is expected to persist as market fundamentals undergo changes amidst increasing volatility, portfolio rebalancing, and sector rotation by investors and fund managers.
Stock analysts think investors will closely monitor expected earnings numbers, published macroeconomic data and government policy direction for further guidance. “We continue to advise investors on taking positions in stocks with sound fundamentals”, Cowry Asset Management stated.
