8 elite companies control nearly half of stock market with N11trn

By Peter Egwuatu

The Nigeria’s equities market was bearish last week as investors’ sentiments remained dampened with the market losing N241.6 billion.

Consequently, the Nigerian Exchange Limited, NGX, All Share Index, ASI declined by 0.9% to close at 49,026.62 points week on week, w/w, while market capitalisation closed at N26.44 trillion from N26.68 trillion penultimate week. Also, the Year to Date, YtD, return moderated to 15.16%.

The downturn was impacted by losses in BUA Cement which lost 10.4%, Total Nigeria 10%, Guinness Nigeria 5.6%, GTCO 4.6 % and Seplat 3.9 %.

Consequently, the Month to Date, MtD, loss increased to -1.6%, while the YtD gain moderated to 14.8%.

 Activity levels were mixed, as trading volume declined by 21.8% w/w while value traded increased by 17.8% w/w. Sectoral performance was broadly negative following losses in the Oil & Gas index  which declined by 4.7%,  Industrial Goods index 3.9%,  Insurance index  2.1%, and Consumer Goods index 0.2% indices. The Banking index which went up by 2.1% was the sole gainer of the week under review.

Reacting to the market development, analysts at Cordros Reseatch stated: “In the week ahead, we believe investors will be focused on the outcome of the MPC meeting scheduled to hold next week to gain further clarity on the movement of yields in the Fixed Income, FI, market. As a result, we envisage an extension of the cautious trading theme, especially from domestic investors. 

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

Also reacting, analysts at Cowry Asset Management Limited, said: “Going into the new week, we expect the market to sustain the bearish run as we head into the political campaign season and in the absence of a major catalyst to trigger bullish momentum as investors seeking alpha rebalance their portfolios.”

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