Market Update September 8
Midweek’s transactions on the Nigerian Exchange was a mix of selloffs and buying interests that had lingered for three consecutive sessions of bear transition, as the key performance index ranged on a very high traded volume, but flat market breadth.
There was also the continued sideways trending on a sell volume driven by local institutional investors buying and selling positions in banking stocks, especially Access Bank which has been recording high transaction volume on a buy position, while FBNH and GTCO witnessed sell volume.
Midweek’s trading opened slightly in the green before oscillating mildly between the mid-morning to afternoon on selloffs across the major sectors and buying interests in medium and low-priced stocks. This situation pushed the composite index to an intraday low of 39,195.82 basis points, from its highs of 39,258.21bps, after which it closed below the opening figure at 39,204.52bps.
Market technicals were negative and mixed as the volume traded was slightly lower than that of the previous day in the midst of a flat breadth and selling sentiment as revealed by Investdata’s Sentiment Report showing 14% ‘buy’ volume and 86% sell position. Total transaction volume index stood at 1.49 points, just as the momentum behind the day’s performance was relatively weak, with Money Flow Index looking down at 36.14points, from the previous day’s 43.68points, an indication that funds left the market, as the market continues to sideways movement.
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Index and Market Caps
At the end of Wednesday’s trading, NGX All Share Index shed 46.77 basis points, closing at 39,204.52bps, from its opening level of 39,251.29bps, representing a 0.12% drop, just as market capitalization fell by N24bn, closing at N20.43tr, from the opening value of N20.45tr, also represented 0.12% deprecation.
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The day’s downturn was driven by selloffs in GTCO, Zenith Bank, Stanbic IBTC, and Ecobank, among others. These impacted negatively on Year-To-Date loss, raising it to 2.65%, just as the loss in market capitalization YTD stood at N630.48bn, representing a 2.90% decline from the year’s opening value.
Bearish Sector Indices
Performance indexes across the sectors were red, as the NGX Oil/Gas closed higher by 0.55%, while the NGX Insurance Index led the decliners after losing 1.01%, followed by Banking and Consumer Goods with 0.32% and 0.08%, as NGX Industrial Goods closed flat.
Market breadth was at par, as losers were equal to gainers in the ratio of 15:15, while activities in volume and value terms were mixed aftermarket players traded 354.06m shares worth N3.20bn, compared to the previous day’s 355.94m units valued at N2.87bn. The day’s volume was driven by trades in FBNH, Access Bank, Universal Insurance, GTCO, and Transcorp.
Regency Assurance and Universal Insurance were the best-performing after gaining 8.51% and 5% and closing at N0.51 and N0.21 per share respectively on market forces. On the flip side, SCOA and Veritas Assurance lost 9.72% and 8.70% respectively, closing at N1.30 and N0.21 per share, purely on selloffs.
We expect the mixed trend to continue as investors and traders utilizes the market’s sideways trending to position, while many stocks are trading within their buy ranges, a situation expected to attract funds into the equity space given the dividend yields capable of serving as a hedge against inflation. Also, institutional investors and others continue to digest the Q2 GDP growth ahead of more first-tier bank results, as well as the continued repositioning of portfolios for the year’s last quarter. Also, investors are still observing the interplay of forces in the FX market as the CBN gives a guideline for the new digital currency platform. The day’s low volume suggests that institutional investors and others are still cautiously looking at the numbers. It is noteworthy that oil prices rebounded in the international market; corporate actions, as well as the interim dividend possibilities, are around the corner.
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