In the financial services sector of the Nigerian Exchange Limited (NGX), Guaranty Trust Holding Company (GTCO) and Fidelity Bank Plc led activity last week.
With the development, the banking sector has continued to dominate in terms of volume, trading 501.3 million shares worth N5 billion in 8,279 deals, or 53.4% of the total number of shares traded.
The information and communications technology sector came in second to the banking sector last week in terms of volume, with 316.3 million units worth N8.7 billion in 1,249 trades. With a turnover of 28.2 million units worth N983.6 million in 846 trades, the oil and gas sector came in third.
Investors transacted a total of 938 million shares worth N16.7 billion in 15,700 transactions, which is more than the sum of 491.8 million units worth N11.9 billion that were transacted in 14,350 transactions on October 14, 2022.
The market capitalization and NGX All-share index both declined by 6.67% to end the week at 44,396.73 and N24.182 trillion, respectively. All other indexes also ended down, with the exception of the NGX CG, NGX Banking, NGX Pension, NGX AFR Bank, NGX AFR Div Yield, NGX MERI Growth, NGX MERI Value, and NGX Industrial, which increased by 0.17, 0.15, 0.58, 2.10, 2.45, 1.22, 3.12, and 3.22 percent, respectively. The NGX ASeM, NGX Growth,
Analysts blamed the continuing index decline on escalating macroeconomic problems and urged Nigeria’s monetary and fiscal authorities to solve problems that discourage investment in order to prevent an impending recession.
“With the dramatic slowdown in bellwether stock prices this week, we expect knowledgeable investors to take advantage of this and make a re-entry into firms with good fundamentals and excellent dividend yields,” said analysts at Cordros Securities.
“However, we do not rule out the possibility of continued profit-taking activities. As a result, we envisage a choppy trading pattern. Nonetheless, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”
“As of today, Nigeria’s economic headwinds continue to deteriorate due to a mismatch of policies developed by both the government and its economic management,” analysts at Investdata Consulting Limited added.
“The forex market problem today is affecting investments and repatriation of profits by investors. We also note the flow of funds into the fixed income segment on the rate hike by the CBN.
“It is time for monetary and fiscal authorities to shake hands and address this issue to save the economy from a looming recession. This is because stock trading and investing depend on the underlying economic situation.
“However, there are sectoral stocks that are still seeing positive activities which investors should pay attention to, as the correction in the NGX index creates buying opportunities in stocks with high dividends and improved earnings growth.”
In addition, a total of 14,672 bonds worth N14.3 million were exchanged in eight deals as opposed to 13,882 bonds worth N13.9 million that were traded in 12 deals the week before.
On the price movement chart, 33 stocks increased throughout the week, up from 25 stocks the week before. 29 stocks experienced greater declines than 24 in the preceding week.
