Profits taking to drive sentiments as investors position for earning season

BY CHARLES ABUEDE

Heading into the Easter holidays, the Nigerian equities market recorded broad-based gains which saw the benchmark index rise 1.99 percent week on week, led by gains made in the banking sector to close the week at 47,558.45 points.

A total of N474 billion was recorded as gains by investors from four straight sessions of last week, majorly buoyed by strong profit-taking activities in the likes of Zenith Bank, Fidelity Bank, Access Bank Holdings and Guaranty Trust Holding Company, respectively.

Regardless of the profit-taking activities seen in the banking sector, which closed the week as the best performing sector with a 5.59 percent gain, market analysts at Afrinvest Securities and Vetiva Capital Management say, for this week, they expect to see further profit-taking in that space amid last week’s gains.

Also, the market is expected to trade positive this week on improved sentiment as the churning out of Q1 results by some companies hits the market, something that is anticipated would drive market sentiments as well.

At the close of the trading week on Thursday, the NGX-All-Share Index increased for the fourth straight session to 47,558.45 points courtesy of price gains in Dangote Cement (+2.4%), Nigerian Breweries (+2.7%), and Guaranty Trust Holding Company (+0.4%).

In view of that, the market year to date return rose to 11.3 percent, while market capitalisation gained N474 billion through the week to N25.61 trillion. Meanwhile, the level of trading activity got smaller as volume and value traded fell 1.7 percent and 59.6 percent respectively to 385.2 million units and N4 billion in value.

Also, it was a mixed sectoral performance as two indices gained, two lost, while the ICT and Oil & Gas indices closed flat. Also, the Insurance and Industrial Goods indices advanced 1.3 percent and 1.2 percent respectively due to gains recorded in AXA Mansard (+3.6%), NEM Insurance (+1.8%), and Dangote Cement (+2.4%).

On the other hand, Thursday closed the week with the Banking and Consumer Goods indices paring 0.6 percent and 0.5 percent respectively, dragged by price declines in Stanbic IBTC (-5.9%), Union Bank of Nigeria (-4.6%), and Dangote Sugar (-5.1%).

Meanwhile, the level of investor sentiment, as measured by market breadth, weakened to 0.05x from 0.25x as 20 stocks advanced, 16 declined while 77 closed flat at the end of the week.

A look at the NGX 30 Index shows the index increased by 2.60 percent to close at 1,822.59 points as against 1,776.45 points at the previous close. Market turnover closed with a traded volume of 266.68 million units with Nigerian Breweries and Fidelity Bank emerging as the key gainers, while Dangote Sugar and Union Bank of Nigeria closed the week as the key losers.