Analysts see more geopolitics tension stoking further global equities risk-off

BY: CHARLES ABUEDE

The continued geopolitical tension stoked more risk-off on equities and other risky assets across some advanced markets as investors in the global financial markets continued to reel in the negative spillover effect of the escalating tension between Russia and Ukraine.

Regardless, global equities analysts have maintained that a likely unsettlement across the international stock market may linger as the tension from the faceoff continues.

As a result, the bears painted advanced markets red, as the United States S&P and NASDAQ indices retreated 1.3 percent and 2.4 percent week on week respectively, while France CAC 40, Germany XETRA DAX, and UK FTSE indices lurched 9.1 percent, 9.0 percent, and 5.9 percent week on week, one after the other.

In the meantime, the BRICS and the Asia & Middle East markets closed largely in the green as rising commodities prices propped up market fundamentals.

Elsewhere on the domestic scene, the local bourse ended the week in the red with a N32.2 billion loss for investors, beating analysts’ positive performance expectation as earnings and dividend announcements failed to buoy sentiment. On this, Afrinvest equity analysts are predicting the weak performance of the equities market will persist this week resulting from the absence of positive catalysts that could lift the performance of the market.

Consequently, the benchmark index chopped down on 3 out of 5 trading sessions to settle at 47,268.61 points with a 0.13 percent decline week on week from 47,394.5 points recorded in the previous week. In the same way, the market year to date return weakened to 10.7 percent while market capitalisation declined week on week to N25.48 trillion from N25.51 trillion. However, trading activity was mixed as the average volume traded fell 18.3 million to 272.4 million units while the value traded rose 21.7 percent week on week to N4.7 billion.

Moving to the various sectors, the market performance was depressed last week with only 2 of the 6 indices closing positive. Thus, the Banking and Consumer Goods indices lost the most, down 2.5 percent and 1.7 percent week on week respectively, on the back of losses in Zenith Bank (-1.9%), United Bank for Africa (-5.2%), International Breweries (-9.1%) and Vita Foam (-9.2%).

Trailing the banking and consumer goods, were the Industrial Goods and Insurance indices, which dipped 0.7 percent and 0.2 percent week on week respectively, following price decline in Lafarge Africa (-8.7%) and AXA Mansard Insurance (-1.7%).

Meanwhile, the Oil & Gas and ICT indices sustained last week’s gain, rising 2.3 percent and 0.2 percent week on week, due to buying interest in Seplat Energies (+20.2%) and MTN Nigeria (+1.2%).

Also, the market investor sentiment waned last week as market breadth pared to -0.3x from 0.3x in the previous week as 22 stocks gained, 47 lost, while 83 closed flat.

And for the NGX 30 Index, it decreased marginally by 0.37 percent to close at 1,810.40 points as against 1,817.12 points on the previous week’s close. Market turnover closed with a traded volume of 104.61 million units. At the close of the week, United Capital and FCMB were the key gainers, while Unilever Nigeria and Sterling Bank were the key losers.