Market decline sees N21bn dip in market cap amid mixed sectoral performance

BY MOTOLANI OSENI

Last week, the domestic bourse experienced a decline as three out of the five trading sessions closed lower, resulting in the All-Share Index shedding 0.04 per cent week-on-week (W-o-W) to close at 100,022.03 points. This downturn led to a market capitalisation decrease of N21 billion W-o-W, closing at N56.581 trillion.

Despite the overall market decline, sectoral performance was mixed. The NGX Consumer Goods index fell by 0.69 per cent W-o-W. However, other sectors showed resilience, with the NGX Banking and NGX Oil & Gas indices leading the gainers’ chart, posting increases of 3.87 per cent and 3.01 per cent respectively.

The NGX Insurance and NGX Industrial indices also reported weekly gains of 2.26 per cent and 0.22 per cent.

Market breadth for the week was positive, with 37 equities appreciating, 45 equities depreciating, and 72 equities remaining unchanged. Veritas Kapital Assurance led the gainers’ table with a 25.00 per cent increase, closing at N1.15 per share. Conoil followed with a gain of 20.48 per cent, ending at N126.50, while Jaiz Bank rose by 19.49 per cent to close at N2.33 per share.

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On the decliners’ side, UPDC Real Estate Investment Trust led with a 17.43 per cent drop, closing at N4.50 per share. Ikeja Hotel followed with a 12.03 per cent loss, ending at N6.95, while Lasaco Assurance declined by 9.80 per cent to close at N2.30 per share.

The week’s total turnover of 2.259 billion shares worth N31.166 billion was notable, although it was lower compared to the previous week’s turnover of 2.651 billion shares valued at N49.976 billion in 41,610 deals.

The Financial Services Industry dominated the activity chart by volume, with 1.801 billion shares valued at N22.030 billion traded in 23,112 deals. This sector contributed 79.75 per cent and 70.69 per cent to the total equity turnover volume and value respectively.

The Oil and Gas Industry followed with 121.001 million shares worth N1.771 billion in 3,124 deals, while the Conglomerates Industry recorded a turnover of 90.713 million shares worth N1.081 billion in 2,277 deals.

Notably, trading in the top three equities—Fidelity Bank, Universal Insurance, and Guaranty Trust Holding Company (GTCO)—accounted for 909.821 million shares worth N12.057 billion in 4,798 deals, contributing 40.28 per cent and 38.69 per cent to the total equity turnover volume and value respectively.

This robust activity highlights significant investor engagement even amid the backdrop of a market decline and a dip in market capitalisation.

Meanwhile, analysts at the Nigerian capital market expected a positive trading pattern on the stock market this week as the half-year earnings reporting season approaches.

With the half-year earnings reporting season drawing closer, more companies like Okomu Oil, VFD Group and The Initiates Plc, among others, have informed the market of their closed period and board meetings to approve the second quarter earnings report.

Analysts noted that, in the midst of all these, it is safe for investors to target companies with consistent track records of dividend payment, strong fundamentals and growth prospects that will support further growth in earnings which price feeds on in any market cycle.

Looking ahead to the new week, analysts at Cowry Assets Management Limited stated that, “it is expected that the bulls will lead the charge as the half-year earnings reporting season approaches.

“Position-taking and sector rotation is anticipated to persist ahead of the new earnings season, bringing changes in liquidity, momentum, volume, and reactions to both positive earnings and disappointing numbers, driving volatility that creates wealth for market players. As the changing market structure and fundamentals persist, investors are advised to position themselves in stocks with sound fundamentals.”

The chief operating officer of InvesData Consulting Limited, Mr. Ambrose Omordion said, “we expect mixed sentiments and profit taking that will create new entry opportunities for discerning market players ahead of earnings reporting season kicking off any moment next week, as portfolios repositioning continue, while taking advantage of pullbacks to buy into value.”