Climate change now top concern for banks — EY Survey

•As GTB announces profit decline

•MPC outcome to determine this week’s fortune

By Peter Egwuatu

Bearish sentiment trailed the equities market amid mixed financial performance released by banks last week with investors losing N34 billion.

The market capitalisation which represents the worth of the equities in the Nigerian Exchange, NGX, closed lower at N20.455 trillion from N20.489 trillion last week.

READ ALSO:ECONOMIC RECOVERY: Banks’ earnings rise to N2.5trn, profit up by 5.1% to N573bn

Specifically, Guaranty Trust Bank, GTCO, recorded 15.76 per cent decline in Profit After Tax,  PAT, while United Bank for Africa, UBA, recorded 36.35 per cent  increase in PAT. The relatively weak financial performance by GTCO rubbed-off on the equities market, hence, the NGX All Share Index, ASI, moderated Week-on-Week, W-o-W by 0.86 per cent  to settle at 38,921.78 points.

Consequently, the Year-to-Date, YtD, loss of the domestic bourse spiked to 3.35 percent .

Sectoral performance was relatively positive as three out of the five indices tracked closed in green. Specifically, the NGX Consumer Goods index, the NSE Oil/Gas index and the NSE Industrial index rose by 0.18 per cent, 2.28 per cent and 0.01 per cent respectively to close at 550.13 points, 371.45 points and 1.959.24 points respectively.

On the flip side, the NGX Banking index and the NGX Insurance index moderated by 0.96 per cent and 3.39 per cent respectively to close at 373.16 points and 185.09 points respectively.

Meanwhile, trading activity appeared positive as some investors took positions amid declining share prices. Hence the number of deals, volume and value of stocks traded increased by 4.60 per cent , 12.26 per cent  and 45.82 per cent respectively to close at 19,315 deals, 1.43 billion units and N13.07 billion respectively.

Commenting on the market performance, analysts at Cordros Securities Limited, said they anticipate cautious trading in the current week following the Monetary Policy Committee, MPC, meeting of the Central Bank of Nigeria, CBN, which holds today and tomorrow.

However, they stated: ‘‘Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.”

Analysts at Cowry Assets Management Limited, said: “In the new week, we expect the equities market index to close in negative territory as investors remain cautiously optimistic amid rising rates in the fixed income space and the depreciating Naira against the USD.”


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