Investors profit-taking in BUA Cement, others down stock market by N39bn

The stock market of the Nigerian Exchange Limited (NGX) saw a bullish run on three consecutive days but the overall impact was not enough to completely cancel out the week-on-week loss recorded in the previous week.

As a result, the NGX All-Share Index declined marginally by 0.14 per cent week-on-week (W-o-W) to close at 51,705.61 basis points, while the market capitalisation shed N39 billion W-o-W to close at N27.875 trillion.

The profit-taking activities in BUA Cement Plc, Dangote Cement Plc, Nigerian Breweries and Lafarge Africa led the weekly loss.

However, most of the sector gauges tracked closed negative. The sector gauges such as the NGX Consumer Goods Index, NGX Insurance Index and NGX Industrial Index decreased by 2.02 per cent, 1.36 per cent, and 11.89 per cent respectively to close at 626.45 points, 174.27 points, and 2,155.90 points respectively.

On the other hand, the Banking and Oil & Gas indices advanced by 0.33 per cent and 0.32 per cent respectively.

Market breadth for the week was negative as 16 equities appreciated in price, Fifty six equities depreciated in price, while 84 equities remained unchanged.

Nigerian Aviation Handling Company (NAHCO) led the gainers table by 10.53 per cent to close at N8.40, per share. Champion Breweries followed with a gain of 10.00 per cent to close at N3.74, while MRS Oil Nigeria went up by 9.80 per cent to close to N16.25, per share.

On the other side, CWG Plc led the decliners table by 14.89 per cent to close at 80 kobo per share. R.T. Briscoe followed with a loss of 14.29 per cent to close at 48 kobo, while Glaxo SmithKline Consumer Nigeria declined by 13.48 per cent to close at N6.10 per share.

Overall, a total turnover of 1.121 billion shares worth N13.703 billion in 22,350 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 940.892 million shares valued at N11.494 billion that exchanged hands previous week in 20,077 deals.

The Financial Services Industry (measured by volume) led the activity chart with 806.824 million shares valued at N6.075 billion traded in 11,071 deals; contributing 71.99 per cent and 44.33 per cent to the total equity turnover volume and value respectively.

The Oil and Gas Industry followed with 95.031 million shares worth N1.449 billion in 1,849 deals, while the Conglomerates Goods Industry traded a turnover of 66.716 million shares worth N169.517 million in 733 deals.

Trading in top three equities; FCMB Group, United Bank for Africa (UBA) and Oando (measured by volume) accounted for 407.770 million shares worth N2.009 billion in 2,181 deals, contributing 36.39 per cent and 14.66 per cent to the total equity turnover volume and value respectively.

For the trading this week, analysts said: “The possibility of the uptrend being sustained is high and a function of market forces and improved economic conditions during this month and beyond, following which we advise investors to play defensive stocks and reduce investment risks around the market.”

Cordros Securities Limited said: “We expect the choppy trading pattern that played out last week to persist in the week ahead, as investors continue to cherry-pick stocks with attractive dividend yields, and at the same time remain cautious about leaving gains in the market.

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

In the new week, analysts at Cowry Assets Management Limited expected to see mixed reactions to the daily change of the local bourse.

Meanwhile, with the expectations of second quarter (Q2) numbers coming in over the next few weeks we continue to maintain positive sentiments in the market although profit-taking will likely set in as prices rise. Investors are advised to trade on companies’ stocks with good fundamentals and a positive outlook so as to avoid falling into the bear trap.