The Nigerian Exchange (NGX) Insurance Index emerged as the leading loser during the Sallah holiday-shortened trading week, experiencing a notable decline of 1.32 per cent on a week-on-week basis. This significant drop in the Insurance Index played a crucial role in contributing to a broader market downturn, which saw the overall market indices fall by 0.18 per cent.
Broader Market Indices Decline
The broader market indices were not spared from the downward trend, as evidenced by the NGX 30 Index, which recorded a 0.16 per cent decline. Similarly, the NGX Banking Index experienced a slight dip, falling by 0.04 per cent week-on-week. These declines in key indices reflect the overall bearish sentiment that prevailed in the market during the week.
Gains in Oil and Gas, Consumer Goods, and Pension Indices
Conversely, not all sectors experienced losses. The NGX Oil and Gas Index led the gainers, rising by 0.35 per cent week-on-week. This positive performance was followed by the NGX Consumer Goods Index, which increased by 0.29 per cent. Additionally, the NGX Pension Index saw a rise of 0.20 per cent, and the NGX Industrial Goods Index advanced by 0.10 per cent week-on-week. These gains in specific sectors provided a glimmer of hope amid the overall market decline.
Sell Pressure in Declined Sectors
The sell pressure witnessed in the declined sectors led to negative price movements in the stocks of several companies. Notably, VFD Group, AIICO Insurance, and AXA Mansard were among the stocks that experienced downward price movements. Other affected stocks included FBN Holdings, Fidelity Bank, Zenith Bank, MTN Nigeria, and Transcorp Hotel, among others. The sell pressure in these stocks contributed to the overall decline in the market indices.
Depreciation in NGX All-Share Index and Market Capitalisation
As a result of the negative market sentiment, the NGX All-Share Index and market capitalisation depreciated by 0.18 per cent. The All-Share Index closed the week at 99,743.05, down from 99,925.38 in the previous week. Similarly, the market capitalisation decreased to N56.424 trillion, compared to N56.527 trillion recorded in the previous week. This depreciation in the All-Share Index and market capitalisation resulted in investors losing a total of N103 billion on a week-on-week basis.
Equities Performance
Despite the overall market decline, there were some positive movements in the prices of equities. During the week, 53 equities appreciated in price, which was higher than the 51 equities that appreciated in the previous week. On the other hand, 25 equities depreciated in price, which was higher than the 24 equities that depreciated in the previous week. Additionally, 76 equities remained unchanged, which was lower than the 79 equities that remained unchanged in the previous week. These movements in equity prices reflect the mixed sentiment that prevailed in the market.
Trading Volume and Value
A total turnover of 3.301 billion shares worth N53.157 billion was traded by investors on the floor of the Exchange during the week. This was in contrast to the 2.633 billion shares valued at N43.652 billion that exchanged hands in the previous week. The number of deals also saw a decrease, with 27,536 deals recorded during the week, compared to 33,709 deals in the previous week. The increase in trading volume and value indicates heightened trading activity despite the overall market decline.
Top Three Equities by Volume
Trading in the top three equities, namely Fidelity Bank Plc, FBN Holdings Plc, and Veritas Kapital Assurance Plc, measured by volume, accounted for a significant portion of the total equity turnover. These three equities contributed 2.469 billion shares worth N37.405 billion in 3,006 deals. This represented 74.80 per cent of the total equity turnover volume and 70.37 per cent of the total equity turnover value. The high trading volume and value in these equities highlight their popularity among investors during the week.
Listing of Futures Contracts
Additionally, the NGX30Z4 and NGXPENSIONZ4 Futures Contracts were listed on the NGX on Wednesday at N3,905 and N3,885 respectively. These contracts are set to expire on December 20. The listing of these futures contracts provides investors with more options for trading and hedging their positions in the market.
Fidelity Bank Plc’s Rights Issue
Fidelity Bank Plc’s rights issue of 3.2 billion ordinary shares of 50 kobo each at N9.25 per share opened on Thursday. The rights issue is on the basis of one new ordinary share for every existing 10 ordinary shares held as at the close of business on January 5. The rights issue is set to close on July 29. This rights issue provides existing shareholders with an opportunity to increase their holdings in the bank at a discounted price.
Market Outlook for Next Week
Looking ahead to the next week, analysts at Cowry Asset Management Ltd. have predicted that the local bourse will trade with mixed sentiment. They attribute this to low valuation and portfolio repositioning for value stocks as investors continue to exhibit a wait-and-see approach. The analysts advised market players and investors to trade in stocks of companies with sound fundamentals, as trading volume patterns continue to fluctuate. According to them, the present market outlook suggests buying interest in some sectors and profit-taking in others, amid a wait-and-see attitude.
In conclusion, the Sallah holiday-shortened week saw a mixed performance in the Nigerian stock market. While some indices and sectors experienced declines, others recorded gains. The overall market sentiment was bearish, leading to a depreciation in the All-Share Index and market capitalisation. However, increased trading volume and value, as well as positive movements in some equities, provided a silver lining. Looking ahead, analysts predict mixed sentiment in the market, with a focus on value stocks and companies with sound fundamentals.
