Profit-taking Activities Drag Down Stock Market Performance

For the second consecutive week, investors’ profit-taking activities had dominated the equities market of the Nigerian Exchange Limited (NGX), dragging down the stock market performance.

For instance, the benchmark index recording losses in four of the five trading sessions. Before the NGX halted the downtrend on Friday after trading losses were recorded due to selloffs on bellwether stocks.

Consequently, year-to-date return moderated as the NGX All-Share Index ended the week 3.1 per cent lower to close at 50,370.25 points.

Precisely, stockbrokers at Cordros Capital said in a market report that the sell-offs in MTNN resulted in a 12.6 per cent decline in the company share price.

STANBIC IBTC’s share price lost 10.0 per cent, the maximum allowable loss per day in the local bourse. Consumer goods giant, NESTLE Nigeria Plc.’s share price declined by 9.8 per cent and GTCO dipped by 4.3 per cent, thus driving the weekly loss.

Data from the stock market indicates that activity levels within the market improved, as trading volume and value increased by 68.5 per cent and 10.0 per cent week on week, respectively.

“We believe the full swing of the H1-2022 earnings season will dictate market sentiments and possibly drive positive performance as investors hunt for bargains in fundamentally sound stocks with a consistent history of interim dividend payments”, Cordros Capital said in its market note.

Stocks analysts envisage there will be intense selling pressures on companies’ shares that grossly underperform in the first half of the financial year 2022.

On Friday, the Nigeria stock market halted the eight consecutive sessions’ decline to rebounds by 1.42 per cent as investors begin to take advantage of recent low prices of fundamentally viable stocks ahead of half-year dividend earnings.

Market capitalisation gained N279.16 to increase by 1.42 per cent and closed at ₦27.16 trillion. The market activities were mixed, as the total volume rose by 23.54 per cent while the total value dipped by 28.29 per cent.

Atlass Portfolios Limited market note indicated that about 254.77 million units valued at ₦2.81 billion were transacted in 4,905 deals. On the last trading day, ZENITH BANK emerged as the most traded stock in terms of volume, accounting for 11.08 per cent of the total volume of trades.

Nigeria’s most capitalised bank was followed closely by FLOURMILL (9.21%), UBA (7.60%), FBNH (7.44%), and DEAPCAP (5.59%) to complete the top five on the volume chart. FLOURMILL was the most traded stock in value terms, with 20.90 per cent of the total value of trades on the exchange, stockbrokers said.

UBN led the gainers list by 10.00 percent, followed closed by UCAP (9.90%), NGXGROUP (9.75%), ZENITHBANK (9.52%), UACN (8,74%), ACCESSCORP (5.88%), MTNN (5.32%), GTCO (5.03%), WAPCO (3.54%), OANDO (1.01%) and fifteen others.