June 27,2022

The downward trend in the Nigerian equities market continued for the second consecutive week with investors losing over N807 billion in two weeks. 

Trading results from NGX showed that market capitalization dropped to N27.874 trillion at the end of trading on Friday, from N28.681 trillion on Friday June 10th

The market capitalisation represents the total value of investors’ worth on the Exchange

In the same manner another major equities market gauge, the All Share Index, ASI declined to 51,705.61 points last Friday from 53,201.38 points on June 10th

Consequently, analysts have advocated cautious trading by investors this week till companies release their half year financial performance for the year 2022.

They also advised investors to patronise the fundamentally justified stocks in order to minimise risk arising from fluctuation in market price.

Meanwhile, market performance last week showed that losses recorded in the shares of heavyweight cement companies Dangote Cement and BUA Cement, on the first trading day of the week, offset the cumulative gains of 1.9 per cent as of Friday, as the Nigerian Exchange Limited, NGX suffered its second consecutive weekly loss, Vanguard reported

As a result, the All-Share Index declined marginally by 0.1 per cent Week on Week, w/w to close at 51,705.61 points. Notably, the profit-taking activities led to losses in BUA Cement which dropped by 3.2 per cent , Dangote Cement 0.7 per cent , Nigerian Breweries 5.5 per cent and WAPCO 3.2 per cent.

Consequently, the Month to Date, MtD and Year to Date, YtD return settled at -2.4 per cent and 21.0 per cent, respectively. However, activity levels were stronger than the prior week, as trading volume and value increased by 19.1 per cent w/w and 19.2 per cent w/w, respectively.

Commenting on market activity, analysts at Cordros Capital Limited stated: “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

“Investors are advised to trade on companies’ stocks with good fundamentals and a positive outlook so as to avoid falling into the bear trap.”