Profit-taking Persist as Stock Market Commences Week on Negative Note

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The Nigerian equities market yesterday closed on a negative note, to halt the two consecutive days of positive sentiment trading by investors at the close of business the previous week.

At the close of trading yesterday, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) declined by 8.12 basis points, representing a drop of 0.02 per cent, to closed at 39,252.89 basis points. Similarly, the overall market capitalisation value shed N5 billion to close at N20.451 trillion.

The market loss was driven by price depreciation in large and medium capitalised stocks amongst which are; Flour Mills of Nigeria, GlaxoSmithKline Consumer Nigeria, Stanbic IBTC Holding, Dangote Sugar Refinery and May and Baker Nigeria.

However, investor sentiment as measured by market breadth closed positive, as 21 stocks advanced while 15 declined. Linkage Assurance recorded the highest price gain of 8.93 per cent to close at 61 kobo, per share. FTN Cocoa Processors followed with a gain 8.89 per cent to close at 49 kobo, while Mutual Benefits Assurance went up by 7.14 per cent to close at 30 kobo, per share.

Ecobank Transnational Incorporated (ETI) rose by 5.77 per cent to close at N5.50, while Universal Insurance gained five per cent to close at 21 kobo, per share. On the other hand, GlaxoSmithKline Consumer Nigeria led the losers’ chart by 9.56 per cent to close at N6.15, per share. Consolidated Hallmark Insurance followed with a decline of 8.62 per cent to close at 53 kobo, while Sovereign Trust Insurance lost 7.69 per cent to close at 24 kobo, per share.

May and Baker Nigeria lost 6.67 per cent to close at N4.48, while University Press shed 6.03 per cent to close at N1.09, per share.

The total volume of trades increased by 17.0 per cent to 210.954 million units, valued at N1.384 billion, and exchanged in 3,989 deals. Transactions in the shares of Access Bank topped the activity chart with 30.521 million shares valued at N282.145 million. Mutual Benefits Assurance followed with 26.827 million shares worth N8.004 million, while Sovereign Trust Insurance traded 21.377 million shares valued at N5.136 million.

Universal Insurance traded 12.945 million shares valued at N2.590 million, while Honeywell Flour Mills transacted 12.917 million shares worth N48.033 million.

On trading activities for this week, analysts at United Capital Plc said “We expect the market to drift sideways barring any major trigger. We anticipate some investor bias for banking stocks, as market participants position for interim dividends.”

Investment analysts have said that activities in the nation’s stock market will be bullish this week over positioning by investors in interim dividend stocks.

They posited that the market provides an ample opportunity for capital gains but advised investors to position in only fundamentally sound stocks. According to analysts at Cowry Assets Management Limited, in the new week, we expect the equities market index to trade positively as investors position ahead of qualification period for interim dividend payment.

Analysts at Cordros Securities Limited predicated that “This week, we expect earnings from the big banks, specifically Guaranty Trust Bank Holding Company (GTCO) and United Bank for Africa (UBA) to drive buying sentiments on the bourse, as the declaration of interim dividends may likely accompany the results.

“Overall, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”

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