Stock investors gain N885bn, analysts expect selling pressure

Investors in the nation’s stock market gained N885bn last week as the market capitalisation of equities rose to N13.601tn.

The All-Share Index of the Nigerian Stock Exchange appreciated by 6.96 per cent to close the week at 30,881.29 basis points.

A total turnover of1.698 billion shares worth N57.895 billion in 24,328 deals were traded by investors on the floor of the NSE last week in contrast to a total of 1.172billion shares valued at N17.887 billion that exchanged hands in 18,380 deals the previous week.

The financial services industry (measured by volume) led the activity chart with 1.121 billion shares valued at N8.708bn traded in 13,380 deals, thus contributing 66.01 per cent and15.04 per cent to the total equity turnover volume and value respectively.

The Information and Communications Technology Industry followed with 324.332 millionshares worthN40.717 billion in 3,330 deals.

The third place was occupied by the consumer goods industry with a turnover of75.831 million shares worth N2.948bn in 2,957 deals.

Trading in the top three equities, namely MTN Nigeria Communications Plc, Sovereign Trust Insurance Plc (measured by volume) accounted for 726.103 million shares worth N41.622bn in 4,972 deals, contributing 42.75 per cent and 71.89 per cent to the total equity turnover volume and value respectively.

Thirty equities appreciated in price during the week, higher than 16 in the previous week; 40equities depreciated in price, lower than 42 equities of the previous week; and 98 equities remained unchanged, lower than 109 equities in the preceding week.

Analysts at Afrinvest Securities Limited said building on the momentum from MTN Nigeria’s listing, the local bourse sustained a positive performance last week as the ASI recorded gains on four of five trading sessions, closing above the psychological benchmark of 30,000bps for the first time in six weeks.

They said, “The equities market has recently received a boost from the listing of MTN, but investor sentiment remains weak. We believe the lack of reforms and broad economic weakness continue to be drawbacks to an upturn in performance despite cheap valuation relative to emerging and frontier market peers.

“Following a bullish performance this (last) week, we expect sell pressures next (this) week as investors look to take profits on stocks that have recorded strong gains.”

Analysts at Cordros Capital Limited noted that a rally in the shares of market heavyweights, MTN Nigeria (+28.6 per cent) and Dangote Cement Plc (+13.6 per cent) drove the market to its highest weekly gain since January 12, 2018.

“Clearly, the gain was not broad-based, at such we reiterate our cautious trading pattern. Meanwhile, we believe that the blend of positive macroeconomic fundamentals and compelling valuations still supports a near-term recovery,” they added.
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