The Nigerian equity market was in the red zone throughout last week, as investors lost N1.57tn.
According to analysts, the pullback in the domestic equity market, which has persisted for some weeks, reflects the current market dynamics and changes in fundamentals in the face of a high-interest rate environment, mixed macroeconomic data and yields in the alternative investment windows.
At the end of the week, the market capitalisation and the All-Share Index depreciated by about 2.71 per cent to close at N56.296tn and 99,539.75 points.
The year-to-date returns of the market closed lower at 33.12 per cent as against 36.83 per cent in the prior week.
Sell-offs in stocks worth over one trillion were the major drivers of the equity market loss, as investors dumped banking stocks in the wake of the recapitalisation drive by the Central Bank of Nigeria.
Investors exchanged 1.6 billion shares worth N32.31bn in 44,915 deals, which was higher than the 1.13 billion shares valued at N28.65bn that were traded in 21,921 deals in the previous week.
The financial services industry (measured by volume) led the activity chart with 1.148 billion shares valued at N22.42bn traded in 26,192 deals; contributing 71.87 per cent and
69.39 per cent to the total equity turnover volume and value, respectively.
The conglomerates industry followed with 117.629 million shares worth N1.58bn in 2,501 deals and the third place was the oil and gas sector, with 92.498 million shares worth N810.99m in 2,621 deals.
The top three equities, which saw the highest number of activities, were all banking stocks. They included Access Holdings Plc, United Bank for Africa Plc and
Zenith Bank Plc, which measured by volume accounted for 570.027 billion shares worth N14.08bn in 12,079 deals, contributing 35.69 per cent and 43.57 per cent to the total equity turnover volume and value, respectively.
Across the sectors, it was another week of market-wide bearish performance as the banking index led the losses by 11.46 per cent week on week driven by adverse price movements in Guaranty Trust Holding Company, Unity Bank, Jaiz Bank, UBA and Access Holdings.
Also, downbeat were the insurance (2.80 per cent), industrial goods (2.71 per cent), and consumer goods (0.96 per cent), which got dragged by southward movement in CHAMS, SUNU Assurances, Dangote Sugar, Unilever, Flourmill and Oando.
Sovereign Bond, however, appreciated by 3.57 per cent, while the ASeM and Oil and gas indices closed flat.
At the close of the week, some of the best-performing stocks for the week included Morison Industries, which gained 45.31 per cent to close at N3.72, Guinness Nigeria, whose stocks appreciated by 10 per cent to N55 per unit and Academy Press, which rose by 9.77 per cent to close at N1.91.
On the decliner’s chart were GTCO, which lost 19.08 per cent to close at N33.50, Unity Bank depreciated by 19 per cent to N1.62 and Livestock Feeds lost 18.99 per cent to N1.45.
During the week, some listed companies like Fidelity Bank and Industrial & Medical Gases Nigeria released their audited results and proposed dividends for shareholders.
While Fidelity Bank’s board proposed a final dividend of N0.60, IMG Plc announced a final dividend of N0.50k for their shareholders.
In the coming week, analysts at Cowry Research project that the current trend of pullback may continue on the back of portfolio rebalancing and sector rotation by investors and fund managers.
“We think investors will closely monitor expected earnings numbers, published macroeconomic data and government policy direction for further guidance,” the Cowry Research weekly market report said.
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