Stock market closes positively for Christmas holidays

Ahead of Santa Claus and the year-end rally, analysts expect the Nigerian stock market to close positively this week.

Analyst optimism

Analysts at Afrinvest Limited stated that “we expect the market this trading week to extend last week’s positive performance driven by bargains as investors continue to review their portfolios for the next year.”

In the new week, analysts at Cowry Assets Management Limited expected the local stock market to be bullish ahead of the usual Santa Claus rally and corporate action.

Also, Cordros Securities Limited expects market performance to be dominated by the bulls in the coming week, as early bird positioning in dividend-paying stocks ahead of the full-year 2021 dividend statements outweighs profit-taking activity.

“Nevertheless, we reiterate the need to position only in fundamentally healthy stocks, as the weak macro environment continues to be a significant headwind to corporate earnings,” it said.

InvestData Consulting Limited’s chief operating officer, Ambrose Omordion, said: “We expect the low liquidity and shifting investment decision to maintain the trend in this direction ahead of Santa week as market players review the November consumer price index and events. in the fixed income market after the index action of the Nigerian Exchange (NGX) pulled back to trade above its 50-day moving average on low sales volume in light of asset rebalancing and seasonality likely to affect stock prices in the run-up to the window dressing at the end of the year.”

He pointed out that “the relatively low volume trading during the retracement is creating new buying opportunities based on the third quarter (Q3) numbers. Also, candlestick formation and volume traded during the session showed that institutional players are not buying yet. It is equally noteworthy that during a ranging market, many players sit on the fence waiting for a breakout or down before jumping into any position.Even if many stocks trade within their buy range, a situation is expected to send more money to the stock market will pull, given the dividend yield that can serve as a hedge against inflation.

Last week’s trading activity

The domestic stock market closed northbound last week amid renewed investor interest. Amid bargain hunting on the domestic stock market, the All-Share Index rose 470.34 basis points, or 1.12 percent, week-over-week (WoW) to 42,353.31 points. Similarly, the market cap increased by N253 Billion WoW to close at N21.107 Trillion.

Most sub-indices also closed in green. The NGX Insurance, NGX Consumer Goods and NGX Industrial indices gained 0.04 percent, 0.63 percent and 0.38 percent, closing at 190.93 points, 550.41 points and 2,081.14 points, respectively. However, the NGX Banking and NGX Oil & Gas indices fell 1.82 percent and 0.57 percent, closing at 395.38 points and 350.65 points, respectively.

Market breadth for the week was positive: 32 stocks rose in price, 28 stocks fell, while 96 stocks remained unchanged. Meyer Plc led the winners’ table with 27.27 percent to close at 42 kobo, per share. ROYAL Exchange followed with a 15.00 percent gain, closing at 69 kobo, while FTN Cocoa Processors rose 13.51 percent to nearly 42 kobo, per share.

On the other hand, Champion Breweries led the fallers’ table by 13.65 percent to close at N2.34 per share. UPDC followed with a loss of 10.17 percent to close at N1.06, while e-Tranzact International fell 9.57 percent to close at N1.89, per share.

In all, aggregate sales of 1.317 billion shares worth N15.330 billion in 18,292 deals were traded by investors on the trading floor last week, as opposed to a total of 2.630 billion shares worth N26.900 billion sold last week from hand exchanged in 20,848 offers.

Financials (measured by volume) led the chart of activity with 899.768 million shares worth N7.325 billion, traded in 9,326 deals; contribute 68.32 percent and 47.78 percent respectively to the total volume of sales and the value of equity. The Consumer Goods Industry followed with 209.502 million shares worth N2.796 billion in 2,866 deals, while the Conglomerates Industry traded turnover of 93.813 million shares worth N663.135 million in 485 deals.

Trading the top three stocks; FBN Holdings (FBNH), International Breweries and Access Bank (measured by volume) accounted for 469.879 million shares worth N4.170 billion in 1,958 deals, contributing 35.68 percent and 27.20 percent respectively to total revenue volume and the value of the shares.