Profit taking to Pervade Equities Market this Week

Having enjoyed three straight weeks of bullish trading, operators in the Capital Market said that there could a slowdown in activity this week as investors move to take profit.

They also posited that investors would take position on stocks that are trading at relatively low price. The Nigerian Stock Exchange, NSE, sustained its bullish momentum for the third consecutive week, as gains recorded across all sector indices, apart from the consumer goods sector, strengthened market performance. This resulted in 17.91 percent increase in the All Share Index, ASI, year-to-date, while the equities capitalisation rose by N2.54 trillion or 18.6 percent during this period.

According to analysts at Vetiva Capital, the market traded mostly sideways last week, indicated by mixed closes across key sectors and erratic market breadth. They stated that barring any fundamental news flow this week, the equities market would record another week of varied trading ‘as investors take profit and seek bargain names’.

In its analysts’ note, Meristem Securities Limited, said: “In the coming week, while we envisage a positive close, we expect trickles of sell-offs on counters currently trading at high prices”.

However, analysts at Cowry Assets Management Limited, projected a decline in the ASI week-on-week amidst profit taking. Meanwhile, the Nigerian bourse maintained its week-on-week bullish streak, as the ASI advanced by 5.11 percent to close at 45,092.83 points from 42,898.90 points. Similarly, the market capitalisation rose by the same margin or N79 billion to close at N16.154trillion from N15.368 trillion in the previous week.

The Banking sector propelled by strong gains in tier 2 banks like FCMB Group, Diamond Bank Plc and Fidelity Bank Plc, recorded the highest return in the week, advancing by 8.50 percent to close at 619.14 points.

The insurance sector recorded 3.84 percent return, driven by gains in NEM Insurance, Law Union & Rock Insurance Plc and Axa Mansard Insurance Plc which rose by 18.06 percent, 15.48 percent and 14.40 percent respectively. The Oil and Gas sector was the next as it rose by 1.95 percent, an action market operators attributed to price gains on some of the sector’s heavy weights led by Mobil Oil Nigeria Plc, which rose by 13.68 percent. The industrial goods sector was up 1.06 percent on account of 31.98 percent increase in Cement Company of Northern Nigeria, CCNN.

However, the consumer goods sector declined by 1.31 percent following sell-offs witnessed on most companies. Gainers and losers 40 companies appreciated in price compared to 32 companies that recorded price depreciation, while the price of 100 companies remained unchanged.

Skye Bank Plc led the gainers table during the week, rising by 53.57 percent to close at N1.29 from N0.84. Unity Bank Plc followed with 48.78 percent increase to close at N1.22 from N0.82. Wema Bank closed as the third on the top gainers chart, appreciating by 48.10 percent to close at N1.17 from N0.79, while Diamond Bank Plc and Caverton Offshore Group chalked up by 40.55 percent and 38.75 percent to close at 3.57 and N2.22 from N2.54 and N1.60 per share respectively.

Conversely, NASCON Allied Industries Plc topped the losers’ chart, dropping by 13.64 percent to close at N19 from N22, followed by Leventis Nigeria Plc which fell by 12 percent to close at N0.66 from N0.75 per share.

Vitafoam Nigeria Plc dropped 11.50 percent to close at N3.00 from N3.90. Linkage Assurance Plc was down 11.11 percent to close at N0.80 from N0.90, while Honeywell Flour Mill Plc went down by 10.23 percent to close at N3.16 from N3.52.

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