At the conclusion of last week’s transactions on the Nigerian Exchange Limited, market indices were negatively impacted by profit-taking operations reported by Stanbic IBTC, Vitafoam, Nigerian Exchange (NGX) Group, and Honeywell Flour Mills (NGX).
Stanbic IBTC specifically lost N3, Vitafoam lost N2.35 kobo, and NGX Group lost N2.10 kobo. Even though the benchmark index fell in three of the five trading sessions, Honeywell Flour Mills also fell by 28 kobos.
As a result, the market capitalization and NGX All-Share Index (ASI) declined by 0.7% to conclude the week at 49,695.12 and N26.805 trillion, respectively.
All other indexes also ended down, with the exception of the NGX Insurance, NGX MERI Value, and NGX Consumer Goods Indices, which increased by 1.04, 0.87, and 0.72 percent, respectively, while the NGX ASM index ended level.
Ambrose Omordion, the Chief Research Officer of Investdata Consulting Limited, responded to market performance by claiming that the September effect is to blame for the oscillation pattern in the market.
He claims that it is widely believed that regular investors liquidate their assets during this time to pay for school expenses.
Ahead of the Q3 profits reporting season, he mentioned additional variables that were negatively affecting the market, such as the August inflation report, the outcome of the upcoming monetary policy committee meeting, the worry of a global economic recession, and election-year stress.
He added: “Also, the market continues its oscillation of making lower lows and lower highs to create buy opportunities for discerning investors as revealed by price action, volume and momentum.”
Analyst at Cordros said: “We expect alpha-seeking investors to rotate their portfolios towards cyclical stocks that delivered decent earnings during the Q2-22 earnings season amid the yield uptick in the FI market.
“However, we think the absence of a near-term catalyst will likely skew overall market sentiments to the negative side, particularly as the political space gets heated.
“Notwithstanding, we reiterate the need for positioning in only fundamentally sound stocks as the unimpressive macro environment remains a significant headwind for corporate earnings.”
Further analysis of the trade revealed that investors on the Exchange’s trading floor transacted 949.8 million shares worth N9.3 billion in 18,525 deals, as opposed to 1.1 billion worth N12.9 billion in 19,305 deals during the time of September 2, 2022.
With 735.3 million shares worth N4.13 billion moved in 10,186 deals, the financial services sector led the activity chart in terms of volume and contributed 77.4% of the total equity turnover.
The conglomerate sector came in second with 69.8 million shares trading for N191 million in 570 transactions. The ICT sector came in third with 1,744 transactions totaling 44.4 million shares worth N2.8 billion.
Trading activity in the top three stocks, Sterling Bank Plc, United Bank for Africa Plc, and Transnational Corporation Plc, totaled 472.7 million shares worth N1.2 billion in 2,333 transactions, accounting for 49.8% of the total equity turnover.
A total of 3,952 bonds for N1.7 million were exchanged in 32 deals, down from 7,811 bonds worth N837,295.25 that were traded in 25 deals the week before.
In contrast to the 43 stocks that gained value the week before, just 22 stocks did so this week. In the preceding week, 36 stocks lost 21 in value while 98 stocks showed no change.
