By Nkiruka Nnorom

Losses recorded in the shares of banking stocks including Zenith Bank Plc, Stanbic IBTC Bank and FBN Holdings Plc as well as Airtel Africa Plc dragged the equities market to the negative region with investors losing N189 billion. 

The market had recorded declines in three of the five trading sessions during the week following the sell-off.

Breakdown of the week’s trading showed that Zenith Bank recorded the highest decline of -5.3 percent, followed by Stanbic IBTC Bank (-4.6%), Airtel Africa (-2.0%) and FBN Holdings Plc (-1.4%).

Resultantly,  the twin benchmark indices the All Share Index (ASI) and the market capitalisation of all listed equities slided by 0.71 percent to close at 49,695.12 and N26.805 trillion respectively.

Further analysis showed that activity levels were weak, as trading volume and value declined by 20.5 percent and 27.8 percent to 949.82 million units and N9.33 billion from 1.195 billion units and N12.924 billion respectively. 

Sectoral performance was mixed as two of the insurance (+1.0%), and the consumer goods (+0.7%) sectors advanced, while the banking (-0.6%) and oil & gas (-0.1%) sectors declined.

The industrial goods sector, however, closed flat.

Commenting on the performance, analysts at Cordros Capital, a Lagos-based investment banking firm, said: “We expect alpha-seeking investors to rotate their portfolios towards cyclical stocks that delivered decent earnings during the Q2-22 earnings season amid the yield uptick in the fixed income market. “However, we think the absence of a near-term catalyst will likely skew overall market sentiments to the negative side, particularly as the political space gets heated. 

Notwithstanding, we reiterate the need for positioning in only fundamentally sound stocks as the unimpressive macro environment remains a significant headwind for corporate earnings.