The Nigerian equities market witnessed a lull in the week ended June 10, 2016 as key measurement indicators- Nigerian Stock Exchange(NSE) All-share index (ASI) and Market Capitalisation recorded 1.45 per cent decline each, to close the week at 27,232.62 basis points(bps) and N9.35 trillion respectively.
Apart from the major indicators, other indices on the Exchange closed in red, excepting the NSE Alternative Securities Market index and a few others which managed to record some increase.
“Similarly, all other indices finished lower during the week, with the exception of the NSE ASeM Index, NSE Insurance Index and the NSE Oil/Gas Index that rose by 0.25 per cent, 1.71 per cent and 1.97 percent respectively, according to the NSE weekly stock market report for June 10, 2016.
Analysts at Cordros attribute the drop in investors’ appetite for stocks to profit-taking as well as the delayed in the release of the much talked about ‘flexible Foreign Exchange(Forex) policy’.
“This is coming on the heels of persistent profit-taking in the Nigerian equities market, as market activities this week further gave a nod to the fact that investors remained spooked by the uncertainty surrounding the nation’s forex policy,” Cordros weekly market update affirmed.
Profit taking is the act of selling stock to take advantage of a sharp rise in the stock price, which pushes prices down temporarily but implies an upward market trend.
Recall that following a free-fall of the naira against the dollar particularly at the parallel market, in addition to the significant disparity between the inter-bank exchange rate and the parallel market, Central Bank of Nigeria(CBN) governor, Godwin Emefiele promised at the last Monetary Policy Committee(MPC) meeting held in May that it would be rolling-out a more flexible Forex policy.
Meanwhile, the report at the close of the week’s trading on the Nigerian bourse, shows a turnover of 959.92 million shares worth N7.87 billion in 17,561 deals were traded this week by investors compared to a total of 1.263 billion shares valued at N11.583 billion that exchanged hands last week in 17,434 deals.
According to the update, the Financial Services Industry (measured by volume) led the activity chart with 782.48 million shares valued at N4.11 billion traded in 10,477 deals; thus contributing 81.51 per cent and 52.27 per cent to the total equity turnover volume and value respectively.
The Conglomerates Industry followed with 59.43 million shares worth N99.62 million in 762 deals.
The third place was occupied by the Consumer Goods Industry with a turnover of 46.55 million shares worth N2.83 billion in 2,703 deals.
More so, trading in the top three equities namely – United Bank for Africa Plc, FBN Holdings Plc and Access Bank Plc (measured by volume) accounted for 288.69 million shares worth N1.28 billion in 3,854 deals, contributing 30.07 per cent and 16.20 per cent to the total equity turnover volume and value respectively.
Also traded during the week were a total of 78,666 units of Exchange Traded Products (ETPs) valued at N866,656.30 executed in 25 deals, compared with a total of 6,500 units valued at N117,637.20 transacted last week in 24 deals.
In terms of bonds, a total of 4,725 units of Federal Government Bonds valued at N5.27 million were traded in three (3) deals compared to a total of 151,970 units of Federal Government and Corporate Bonds valued at N170.962 million transacted last week in 5 deals.
A summary of price changes in the review period shows that 27 equities gained in price during the week, higher than 12 of the previous week.
On the contrary, 41 equities lost in price, lower than 60 reported last week, while 112 equities remained unchanged higher than 108 posted the past week.
