Bargain hunters freeze weekly stock decline; spurs N150bn gain

• As turnover surges 77%

By Omobayo Azeez

Amidst historical downturn, the Nigerian stock market activities last week with a net profit of N150 billion, spurred by bargain hunters in the market.

The market opened for four trading days during week as the Federal Government of Nigeria declared Friday 10th April and Monday 13th public holidays to observe Good Friday and Easter Monday celebrations respectively.

However, the aggregate result of the four sessions during which the market opened was a shift from perpetual negative weekly records as the the market index appreciated by 1.37 per cent.

Specifically, the All-Share Index (ASI), which is reflects the flows of aggregate share prices at the Nigerian Stock Exchange (NSE) in the market added 289.41 points to close at 21,384.03 basis points from the previous figure of 21,094.62 points.

Similarly, market capitalisation followed suit with the recorded profit for the week to close higher at N11.144 trillion from 10.994 trillion it opened the week.

The market was a able to halt its four week southward movement following bargain hunting across capitalised stocks such as  MTN Nigeria which appreciated in  price by 3.3 per cent, WAPCO which grew by  41.3 per cent, as well as tier 1 banking tickers.

As the ASI closed positive to moderate year-to-date (YtD) losses to -20.33 per cent, all other indices finished higher with the exception of NSE Oil/Gas, NSE Lotus II and NSE Industrial Goods which depreciated by -4.76 per cent, , -2.65 per cent and -6.59 per cent while NSE ASeM Index closed flat.

Despite the market closing positive last week, risks remain on the horizon, given the rising cases of COVID-19 in Nigeria, said analysts at Codros Assets Management Limited.

“More so, our base case is for the FGN to extend the presently instituted lockdown in Lagos, Abuja, and Ogun, by another one week. Thus, we advise investors to trade cautiously, taking positions in fundamentally justified stocks,” they said.

Despite that the week opened for just for days instead of the traditional five sessions, investors participations improved as volume of trade as well as market turnover surged by 59.06 per cent and 76.91 per cent.

Investors traded a total turnover of 2.440 billion shares worth N19.932 billion in 18,918 deals through remote trading at the exchange,  in contrast to a total of 1.534 billion shares valued at N11.267 billion that exchanged hands the previous week in 18,928 deals.

The financial services industry, measured by volume, led the activity chart with 2.182 billion shares valued at N11.107 billion traded in 11,322 deals; thus contributing 89.42 per cent and 55.72 per cent to the total equity turnover volume and value respectively.

The industrial goods followed with 102.769 million shares worth N3.633 billion in 2,483 deals and the third place was the consumer goods industry, with a turnover of 51.075 million shares worth N3.578 billion in 1,924 deals.

Trading in the top three equities namely, Omoluabi Mortgage Bank Plc, Guaranty Trust Bank Plc and FBN Holdings Plc, measured by volume, accounted for 1.702 billion shares worth N8.033 billion in 4,443 deals, contributing 69.76 per cent and 40.30 per cent to the total equity turnover volume and value respectively.

Investors also traded a total of 3.027 million units of ETPs valued at N13.034 million were traded during the week in 23 deals, compared with a total of 6,759 units valued at N61,035.98 transacted in the preceding week in 19 deals.

On market expectation for this week, Ambrose Omordion, chief research officer at Investdata Consulting Limited, projected that mixed intraday trend to continue, as short-term profit-taking from this few sessions of a rally is underway.

“Just as market players’ take strategic positions ahead of Q1 2020 earnings reports and impacts of the stimulus package on the economy. Also, more companies are notifying the exchange and investors of their virtual annual general meetings and closed period for 2020 first-quarter earnings reports.

“However, the high dividend yields continue to attract buying interests, while more audited corporate earnings hit the market going forward. This is despite the likely continuation of the selloffs, with investors buying to increase their positions in undervalued stocks ahead of dividend declaration.

“This is also against the backdrop of the fact that the capital wave in the financial market may persist in the midst of relatively low-interest rates in the money market, high inflation and unstable economic outlook for 2020,” he said.