By Peter Egwuatu
The analysts’ projections that the bullish trend experienced in the stock market in January would not be sustained has begun to manifest as profit-taking dragged down the value of the market by N328 billion in the first four days of this month.
Specifically, the market capitalisation, which refers to the total value of stocks on the Nigerian Stock Exchange, NSE dropped to N21.858 trillion from N22.186 trillion at the close of Friday last week. Similarly, another major market indicator, the NSE All-Share Index, ASI dropped by 626.86 points to close at 42,412.66 points on Thursday from 41,785.80 points on Monday.
Meanwhile, analysis of the market transactions on Thursday showed that ASI declined 51bases points, bps to 41,785.80 points as a result of sell-offs in Dangote Cement (-2.5 percent), Zenith Bank (-0.7 percent), and UBA (-1.1 percent).
Consequently, in the Year to Date, YtD return declined to 4.3 percent while market capitalisation fell by N112.1billion to settle at N21.8 trillion . Activity level improved as volume and value of shares traded rose 24.7 percent and 50.3 percent respectively to 629.4 million units and N8.0 billion. The most traded stocks by volume were First Bank Holdings , FBNH (126.4million units), Guaranty Trust Bank, GTBank (87.2million units) and Union Bank Nigeria, UBN (78.4million units) while GTBank (N2.9 billion), FBNH (N923.2 million) and PRESCO (N900.9 million) led by value.
Performance across sectors under coverage was bearish as four indices declined. The Industrial Goods index lost the most, down 1.2 percent. The Insurance and Banking indices fell by 1.1 percent and 0.3 percent respectively. The Consumer Goods index also declined 13bps due to price weakness in Champion Breweries (-9.7 percent. On the flip side, the Oil & Gas indices gained 32bps following sustained bargain hunting in ARDOVA (5.6 percent).
Commenting, analysts at Afrinvest Securities Limited, said: “We expect the market to close in the negative region this week.”
Advising investors, analysts at Invest Data Limited said: “We advise investors to target dividend-paying stocks and fundamentally sound companies with growth prospects in 2021, looking the way of mispriced companies. This is especially as the low-interest rates regime and oil price rally have so far supported the economy and equity market.”