Stocks Rally as Inflation Slowdown Drives Buying InterestStocks Rally as Inflation Slowdown Drives Buying Interest
Nigerian stocks rally Friday as inflation rate slowdown drives buying interest at the local bourse after a negative outing in the previous session. Equities investors gain N42 billion on renewed bargain hunting.Today, Nigeria’s headline inflation rate slides for the third consecutive month to 17.75% in June, according to the latest data released by the National Bureau of Statistics.This could possibly drive funds from the fixed income space into equity as investors rebalance their portfolio ahead of second quarter earnings season releases.NGX
Overturning bearish sentiments, the Nigerian Exchange (NGX) All Share Index (ASI) edged higher by 0.21 per cent while market capitalization jumps 0.25 per cent to N19.77 trillion.Market data shows that price appreciation in bellwether stocks such as UBA, ETI, ZENITH BANK STERLNBK, CAP, BUA CEMENT, MTNN, GTCO, UNILEVER and others.However, market breadth closed negative with 15 gainers versus 16 laggards. Consequentially, the volume and value of stocks traded on the exchange appreciated respectively by 66.72 per cent and 228.06 per cent. A total of 226.74 million units of shares valued at N3.04 billion, were traded in 3,065 deals.GTCO led the volume chart, accounting for 28.36 per cent of the total volume of trades, followed by JAIZBANK (8.05%) SOVERNINS (6.27%) UNIVINSURE (4.89%), and UCAP (4.37%) to complete the top five on the volume chart. GTCO also led the value chart accounting for 73.68 per cent of the total value of trade on the exchange. CAP, VETBANK and UCAP topped the gainers’ chart, with their share prices advancing by 9.47 per cent, 7.78 per cent, and 3.17 per cent, respectively.Meanwhile, CHIPLC led the losers’ table with its share price depreciating by 9.23 per cent to close at N0.59 after opening the day at N0.65.Market Performance for the Week
Bearish sentiments persisted in the local bourse for the second consecutive week, as investors booked profits on bellwether stocks. Cordros Capital analysts said cautious trading dominated the local bourse this week as investors await the release of Q2-21 earnings.Accordingly, the All-Share Index shed 0.1% this week against the previous to close at 37,947.18 points. Consequently, month to date and year to date returns moderated to 0.1% and -5.8%, respectively.Activity levels were weak, as trading volume and value declined by 25.2% and 10.0% this week, respectively. Pertinently, Cordros Capital told clients in an email that sell-offs in bellwether stocks; NB (-3.3%), DANGSUGAR (-2.2%), ZENITH BANK (-2.0%) and BUA CEMENT (-0.7%), drove the weekly loss.Similarly, sectoral performance was broadly negative as the Insurance (-1.1%) index led the losers’ chart, followed by the Consumer Goods (-0.9%) and Industrial Goods (-0.3%) indices. On the other hand, the Oil and Gas (+1.8%) and Banking (+0.1%) indices closed in green. “We believe the outcome of the bond auction scheduled to hold next week will shape market sentiments. As a result, we expect investors to trade cautiously while taking positions in stocks with attractive dividend yields ahead of H1-21 dividend declarations, which intermittent profit-taking activities would match.“Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings”, Cordros stated.Stocks Rally as Inflation Slowdown Drives Buying Interest
