Sterling Bank Plc, Access Holdings Plc, and Guaranty Trust Holding Company Plc (GTCO), three bank equities, dominated activity last week on the Nigerian Exchange Limited (NGXfinancial )’s services market.
With 663.8 million shares worth N5.5 billion moved in 7,240 deals, or 81.5% of the overall equities turnover, the financial sector maintained its volume dominance.
The top three banks accounted for 394.9 million shares worth N2.8 billion in 2,274 trades, or 48.51 percent of the entire amount of equity trading.
The ICT Industry came in second last week in terms of volume, with 44.4 million shares worth N4.5 billion transacted in 1,136 transactions. With a turnover of 27.4 million shares worth N1.2 billion in 3,051 deals, the consumer goods sector came in third.
In total, 15,488 transactions involving 814.1 million shares worth N12.2 billion were made by investors on the trading floor, as opposed to 15,317 transactions involving 1.2 billion units worth N15.2 billion on December 9, 2022.
Reacting to market performance, analysts at Investdata Consulting Limited said: “NGX index sustained its strong momentum due to the prevailing high dividend yields in the stock market, following the ongoing Santa Claus rally and expected year-end window dressing by fund managers, and listed companies who desire to close the year higher.”
“Position-taking will continue ahead of the full-year earnings season, while bargain hunters and speculators continue to take advantage of any pullback or sell-off to buy low ahead of future capital appreciation.”
“Therefore, investors should target companies with a consistent track record of dividend payment with strong fundamentals and growth prospects that will support further price appreciation and payout.”
Cordros Capital said: “In the short term, we still see scope for expansion in valuation multiples, as positioning by early birds in dividend-paying stocks ahead of 2022FY dividend declarations should outweigh profit-taking activities.”
Despite this, we encourage investors to only invest in fundamentally sound stocks because the weak economic story continues to be a major drag on corporate earnings.
On the price movement chart, bargain hunting in some banking companies, including Zenith Bank (+10%, Fidelity Bank: +2.4%, FBNH: +0.9%, Stanbic IBTC +0.8%), and WAPCO (+3%), increased the MTD and YTD returns to +3.5% and +15.5%, respectively.
The market capitalization and NGX All-Share Index both increased by 0.8% to conclude the week at 49,316.29 and N26.861 trillion, respectively.
All other indexes also ended the day higher, with the exception of the NGX consumer goods, NGX growth, and NGX sovereign bond indices, which had declines of 0.2%, 0.5%, and 0.4%, respectively.
The number of stocks that increased throughout the week was 32, up from 31 the week before. While 97 stocks were steady, fewer than the 100 stocks registered the week before, 28 stocks declined, a higher rate of decline than the 26 stocks that fell the previous week.
