In the week ended 21st August 2020, the Nigerian Stock Exchange equities market having started the week with loses on Monday, went on to gain in each of the next four trading sessions, to close the week higher than it started.
The gains were so weak that despite the four day run of consecutive advancement, the index appreciated by only 0.09% to close at 25,221.87, 22.03 points higher than its starting position of 25,199.84.
Investors’ saw a N12.224 billion addition to their wealth, as the market capitalization stood at N13.158 trillion at the end of Friday’s trading session.
The improvement in activity level seen in the preceding week was reversed in the week in review. The activity level waned as both volume and value of shares traded declined by 28.3% and 27.35% respectively.
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A total turnover of 950.414 million shares worth N10.123 billion in 16,647 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 1.327 billion shares valued at N13.934 billion that exchanged hands last week in 19,392 deals.
The Financial Services industry (measured by volume) led the activity chart with 624.278 million shares valued at N6.181 billion traded in 8,313 deals; thus contributing 65.68% and 61.06% to the total equity turnover volume and value respectively.
The Consumer Goods industry followed with 96.320 million shares worth N2.199 billion in 3,148 deals. The third place was the Conglomerates industry, with a turnover of 89.376 million shares worth N145.612 million in 757 deals.
Trading in the top three equities namely Zenith Bank Plc, Guaranty Trust Bank Plc and Transnational Corporation of Nigeria Plc. (measured by volume) accounted for 298.901 million shares worth N4.761 billion in 3,056 deals, contributing 31.45% and 47.03% to the total equity turnover volume and value respectively.
The activity chart below depicts the reversal in the activity level, with the All-Share Index seemly flat lining between 24,750.00 and 25,250.00.
While the waning activity level may be worrying to the NSE, the chart below even shows a more worrying trend. The number of trades/deals being done on each trading session is also declining, which can either mean that market participants are turning away from the market or Investors tilting more and more towards a holding position.
At the end of trading on Friday, 21st August, the NSE ASI loss moderated to -6.04% YTD. Below are the YTD performances of the 5 indices under our watch;
- NSE Insurance Index: +2.37%
- NSE Oil and Gas Index: -28.64%
- NSE Banking Index: -17.43%
- NSE Consumer Goods Index: -28.77%
- NSE Industrial Goods Index: +3.40%
Three of the five indices under our watch closed the week in positive; Insurance Index was up by 4.40% driven mostly by gains in LASACO and CORNERST.
The Oil and Gas Index was down 0.92%, while the Industrial Goods Index was down by 0.41%. The Banking Index and Consumer Goods Index appreciated by 0.81% and 1.88% respectively.
The NSE All-Share Index and Market Capitalization both appreciated by 0.09% to close the week at 25,221.87 and N13.158 trillion respectively.
Thirty-one (31) equities appreciated in price during the week, higher than twenty-nine (29) equities in the previous week.
Twenty-seven (27) equities depreciated in price, lower than thirty-three (33) equities in the previous week, while one hundred and five (105) equities remained unchanged, higher than one hundred and one (101) equities recorded in the previous week.
See top gainers and losers in the table below
The week ahead
Heading into the last week of the month, we anticipate the market performance will be relatively unchanged. It is most likely to be driven by bargain hunting, and profit taking.
LASACO topped the gainers table in the week in review, justifying the BUY rating placed on it in our last Stock Pick. The stock makes our Stock Pick for the week ahead, with the rating changing to HOLD, as we approach its dividend qualification date
UPL and REDSTAREX both made a return to our stock pick, with ratings changed to HOLD after a modest capital appreciation.
Contrary to our expectations, UACN share price suffered further decline in the week in review, despite this, we maintain the ACCUMULATION rating on the stock, as it trades further below our valuation of the company.
We are neutral on UNITYBNK, although it makes a very good JIJO stock, its huge accumulated loses and the fact that its major shareholder is AMCON (34%) reminds one of the defunct SKYBANK, hence our neutral position on the stock.