Uncertainty in the political space has triggered panic sell off of the equities at the Nigerian Exchange Limited (NGX) causing investors to lose N479 billion in one week.
The volume of shares traded also dropped by 16.6 percent as a turnover of 853.7 million shares worth N11.8 billion was recorded in 18,543 deals by investors on the floor of the Exchange, down from a total of one billion units valued at N20.2 billion that changed hands in 18,650 deals on March 10, 2023.
Last week, the all-share Index depreciated by 879.51 points or 1.6 per cent to 54, 915.39 from 55, 794.41 at which it closed for trading on Friday, March 10, 2023, while market capitalisation declined by N479 billion from N30.395 trillion to N29.916 trillion.
Particularly, sell pressures on – MTNN (-4.2 per cent) and GTCO (-7.2 per cent) dragged market indices, moderating the month-to-date (MTD) and year-to-date (YTD) returns to -1.6per cent and -7.2 per cent respectively.
Similarly, all other indices finished lower except NGX Consumer Goods and NGX Growth, which appreciated by 1.11.per cent and 2.90 per cent respectively, while the NGX ASeM, NGX Oil and Gas indices and NGX Sovereign Bond index closed flat.
Reacting to the performance, analysts at Vetiva Dealings and Brokerage said: “The recoveries seen in counters across the board were not sufficient in cancelling out the losses already posted this week, as YTD return fell by 154bps this week.
“We still expect mixed trading in the market in the coming week, as investors cautiously cherry-pick stocks in the equity market, while the decision of the MPC next week will also be keenly anticipated.”
Cordros Capital said: “Looking ahead, we believe investors will focus on the outcomes of the bond auction and the MPC meeting scheduled to hold next week (this week) to gain further clarity on the movement of yields in the Fixed Income (FI) market.
“If the MPC increases the benchmark policy rate and there is a pass-through impact on yields in the FI market, there could be a realignment of investments between markets that would pressure the performance of the equities market.
“As a result, we expect cautious trading from domestic investors in the short term. Overall, we reiterate the need for positioning in only fundamentally sound stocks as the uninspiring macro story remains a significant headwind for corporate earnings.”
On the activity chart, the financial services industry (measured by volume) led the activity chart with 547.5 million shares valued at N7 billion traded in 9,419 deals, thus contributing 64.1 per cent to the total equity turnover volume.
The conglomerate industry followed with 85.1 million units worth N134.7 million in 717 deals. The third place was the consumer goods industry, with a turnover of 52.9 million shares worth N1.6 billion in 2,865 deals.
Trading in the top three equities namely Transnational Corporation Plc, Zenith Bank Plc and Sterling Bank Plc (measured by volume) accounted for 226 million shares worth N2 billion in 2,613 deals, contributing 26.47 per cent to the total equity turnover.
Furthermore, a total of 6,224 units of Exchange Traded Products (ETPs) valued at N1.5 million were traded in 56 deals compared with a total of 11,382 units valued at N1.9 million transacted last week in 74 deals.
In the preceding week, 98,883 units of bonds, valued at N94.1 million were also traded in 31 deals compared to a total of 54,802 units valued at N55.7 million transacted in 14 deals.
Nineteen equities appreciated during the week lower than 22 equities in the previous week while 47 equities depreciated higher than 41 in the previous week.