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Equities Market Rebounds as Bulls Return

June 7, 2021

The bulls returned to the Nigerian stock market last week after the market dipped in May, as investors took advantage of low prices of shares. Consequently, the Nigerian Exchange (NGX) Limited All-Share Index (ASI) appreciated by 1.23 per cent to close at 38,726.10, while market capitalisation closed higher at N20.185 trillion.

Some market analysts had said the decline recorded in the May, which led to a significant reduction in valuations of stocks, was an opportunity for investors to enter the market.

“The undervalued state of the market and rising dividend yields has made equities more attractive, with most of the low-priced stocks outperforming the prevailing inflation rate, making equity space an irresistible hedge for investors against inflation,” InvestData Consulting had said.

It is believed that bargain hunting that attracted the bulls back to the market last week. And according to analysts at Cordros Securities, the market will remain bullish this week.
“We expect alpha-seeking investors to continue rotating their portfolio towards equities amid moderation in the uptick of yields in the fixed income (FI) market.

“We expect market performance to be dominated by the bulls, as positioning by early birds in dividend-paying stocks ahead of H1-2021 dividend declarations should outweigh profit-taking activities. “We reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings,” they said.

Meanwhile, investors traded 1.082 billion shares worth N9.548 billion in 17,933 deals last week, in contrast to a total of 1.037 billion shares valued at N9.471 billion that exchanged hands in 17,577 deals two weeks ago.

The Financial Services Industry led the activity chart with 767.001 million shares valued at N4.356 billion traded in 9,447 deals, thus contributing 70.8 per cent and 45.6 per cent to the total equity turnover volume and value respectively.

The Oil and Gas Industry followed with 83.528 million shares worth N1.454 billion in 1,118 deals, while the third place was occupied by Conglomerates Industry, with a turnover of 72.813 million shares worth N356.723 million in 781 deals.

Trading in the top three equities namely Sovereign Trust Insurance Plc, Zenith Bank Plc and Veritas Kapital Assurance Plc accounted for 235.953 million shares worth N1.820 billion in 1,654 deals.

The price movement chart showed that 33 equities appreciated in price during the week, higher than 32 in the previous week, just as 33 equities depreciated in price higher than 30 equities in the previous week.

University Press Plc led the price gainers with 43 per cent, trailed by Morison Industries Plc with 20.2 per cent. Veritas Kapital Assurance Plc appreciated by 20 per cent, just as Vitafoam Nigeria Plc and Berger Paints Nigeria Plc added 10.8 per cent and 9.8 per cent respectively among others.

Conversely, CWG Plc led the price losers, shedding 26 per cent. Royal Exchange Plc followed with 11.1 per cent, while CAP Plc and Champion Breweries Plc and Ikeja Hotel Plc went down by 10.1 per cent, 9.9 per cent and 9.0 per cent in that order.