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Again, the banking index led the losers’ chart at the end of last week’s transactions on the equities sector of the Nigerian Exchange Limited (NGX) with 2.1 per cent loss, buoyed by price depreciation in some tier-1 banks like Zenith Bank, Accesscorp, GTCO and United Bank for Africa.
Following the sector, last week, were the oil and gas indices which declined by (-0.4 per cent). On the other hand, consumer goods and industrial goods gained (2.4 per cent) and (0.4 per cent) respectively.
Consequently, the NGX all-share index and market capitalisation depreciated by 0.9 per cent and 0.4 per cent to close the week at 64,721.09 and N35.422 trillion respectively.
Similarly, all other indices finished lower except NGX Premium, NGX AFR. Div. Yield, NGX Consumer Goods, NGX Industrial Goods, NGX Growth and NGX Sovereign Bond indices which appreciated by 0.69 per cent, 0.44 per cent, 2.39 per cent, 0.37 per cent, 1.08 per cent and 0.25 per cent respectively while the NGX ASeM index closed flat.
Reacting to market performance, analysts predict mixed sentiments, citing the weak macro environment remains a significant headwind for corporate earnings.
However, they noted that assigning portfolios to the ministers and the $3 billion cash loan to help intervention in Nigeria’s Forex market, coupled with expected first-tier banks earnings reports may trigger market rebound.
Specifically, the chief Research Officer of Investdata Consulting, Ambrose Omordion, said: “The current market position and state of the economy call for cautious trading while discerning investors are taking advantage of the market consolidation and pullbacks.
“It is the time to buy into value stocks with strong fundamentals, as the market looks forward to favourable and positive news that will trigger yet another round of buying interest.
“We expect recovery as mixed sentiments continue on bargain hunting. We expect other market players to digest macroeconomic data, assigning portfolios to the ministers and the $3 billion cash loan to intervene in Nigeria’s FX market amid expected first-tier banks earnings reports and bargain hunting, while portfolio realignment and sector rotation persist.
“However, pullbacks are creating buying opportunities amidst economic reforms of the government, just as more policy pronouncements and economic managers hit the ground running, a situation expected to offer investment direction eventually.”
Cordros Capital said: “We expect market performance to stay mixed in the week ahead as investors rebalance their portfolios following an assessment of corporate earnings released thus far for H1, 23.
“In the medium term, we expect investors’ sentiments to be influenced by developments in the macroeconomic landscape and the movement of yields in the fixed-income market.
“Overall, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.”
Comercio Partners said: “Looking ahead, we anticipate similar activities in the upcoming trading session.” On the activity chart, a turnover of 1.7 billion shares worth N29.4 billion was recorded in 29,477 deals by investors on the floor of the Exchange.
This volume of shares traded was higher than 1.7 billion units valued at N25 billion which was exchanged in 30,652 deals on August 11, 2023. The financial services industry (measured by volume) led the activity chart with 1.2 billion shares valued at N16.9 billion traded in 13,819 deals; thus contributing 69 per cent to the total equity turnover volume.
The conglomerate industry followed with 191.3 million shares worth N843.3 million in 1,829 deals. The third place was the oil & gas industry, with a turnover of 64.3 million shares worth N810.6 million in 2,159 deals.
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