Analysts have anticipated mixed trading on equities performance this week, driven by ongoing portfolio rebalancing and profit-taking activities.
Last week, the stock market experienced notable profit-taking activities and sell-offs, particularly across some mid and large-cap stocks. This downturn further depressed the benchmark index, with low trading volumes and negative market internals highlighting both the market’s weakness and potential opportunities for astute investors.
This trend unfolded as market participants digested the recently released July 2024 Consumer Price Index (CPI) data, which indicated a deceleration in Nigeria’s headline inflation to 33.40 per cent . This period also coincided with expectations surrounding interim dividend declarations.
Analysts Optimisms
Analysts at Cowry Assets Management Limited said, “the market continues to trade within the value area, presenting entry opportunities for discerning investors and savvy traders. Transaction volume patterns and support levels are signalling further buying opportunities, even as market participants look ahead to the forthcoming release of the Q2 2024 GDP report, along with audited half-year earnings and interim dividend declarations.”
Cowry anticipated “a mixed performance in the coming week, driven by ongoing portfolio rebalancing and profit-taking activities. Nevertheless, we continue to advise investors to focus on fundamentally sound stocks.”
On market outlook, the chief operating officer, InvestData Consulting Limited, Ambrose Omordion stated that, “We expect mixed sentiment and bargain hunting to continue on profit taking and sector rotation amidst an oversold region. Portfolios repositioning is however continuing, as investors take advantage of pullbacks to buy into value.”
He added that, “this is amid the volatility and pullbacks that add more strength to upside potential. Consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.”
Last Week’s Trading Activities
By the end of trading for last week, bearish sentiment had firmly gripped the All Share Index (ASI), which fell by 1.51 per cent on a week-on-week basis to close at 97,100.31 points.
This decline was primarily driven by pressured sell-offs in the banking and industrial goods sectors, a reflection of the ongoing interplay of market dynamics amidst heightened volatility.
Additionally, the overall market capitalisation dropped by N847 billion to close the week at N55.132 trillion.
In terms of sectoral performance, the picture was positive, with the exception of the NGX Industrial Goods and NGX Banking sectors, which retreated by 5.16 per cent and 2.28 per cent week-on-week respectively, as profit-taking exerted downward pressure on these sectors in the context of ongoing portfolio realignments.
In contrast, the market pullbacks witnessed during the week provided strong buying opportunities that buoyed investor sentiment. This positive sentiment was reflected in the performance of certain stocks, leading to gains in the NGX Oil & Gas by 5.25 per cent. The NGX Insurance posted a weekly gain of 0.79 per cent, while NGX Consumer Goods grew by 0.37 per cent W-o-W.
Also, market breadth for the week was positive as 39 equities appreciated in price, 66 equities depreciated in price, while 46 equities remained unchanged. R.T. Briscoe led the gainers table by 33.86 per cent to close at N1.70, per share. TotalEnergies Marketing Nigeria followed with a gain of 19.69 per cent to close at N511.90, while Julius Berger Nigeria went up by 18.18 per cent to close to N130.00, per share.
On the other side, Cutix led the decliners table by 17.50 per cent to close at N1.02, per share. BUA Cement followed with a loss of 14.82 per cent to close at N109.80, while Oando UPDC declined by 11.70 per cent to close at N35.85, per share.
Overall, a total turnover of 2.033 billion shares worth N42.155 billion in 45,157 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 2.679 billion shares valued at N49.017 billion that exchanged hands previous week in 47,451 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.377 billion shares valued at N25.652 billion traded in 20,132 deals; contributing 67.73 per cent and 60.85 per cent to the total equity turnover volume and value respectively.
The Oil and Gas Industry followed with 276.729 million shares worth N6.026 billion in 6,848 deals, while the Services Industry traded a turnover of 101.217 million shares worth N682.062 million in 2,475 deals.
Trading in the top three equities; Guaranty Trust Holdings Company (GTCO), Veritas Kapital Assurance Plc and Japaul Gold & Ventures accounted for 674.233 million shares worth N16,055 billion in 3,977 deals, contributing 33.16 per cent and 38.08 per cent to the total equity turnover volume and value respectively.
