By Chinwendu Obienyi
Sentiments in Nigeria’s stock market remained broadly bullish in the second trading week of the year as investors continued to select stocks with attractive dividend yields ahead of 2021 full year (FY) dividend declarations.
This was even as the All-Share Index (ASI) rose by 1.37 per cent week-on-week (w/w) to close at 44,454.67 points while investors gained over N323 billion from N23.628 trillion to close the week at N23.951 trillion.
Specifically, bargain hunting in BUA Foods (+24.1 per cent), Dangote Cement(+8.0 per cent), Guinness (+5.8 per cent), and International Breweries (+5.1 per cent) drove the weekly gain, which drove the market’s year-to-date (YTD) gain about 4.1 per cent.
However, activity levels were weaker than in the prior week, as a total turnover of 1.600 billion shares worth N32.716 billion in 22,607 deals was traded last week by investors on the floor of the exchange, in contrast to a total of 2.027 billion shares valued at N59.014 billion that exchanged hands in the previous week in 15,750 deals.
The Financial Service Industry (measured by volume) led the activity chart with 731.264 million shares valued at 6.517 billion traded in 10,822 deals; thus contributing 45.71 and 19.92 per cent to the total equity turnover volume and value respectively.
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The Conglomerate Industry followed with 403.646 million shares worth N 452.909 million in 1,537 deals while the Consumer Goods Industry recorded a turnover of 314.768 million shares worth N17.759 billion in 4,101 deals.
Trading in the top three equities namely Transnational Corporation of Nigeria Plc, BUA Foods Plc, Jaiz Bank Plc (measured by volume) accounted for 775.685 million shares worth N16.625 billion in 2,644 deals, contributing 48.49 and 50.82 per cent to the total equity turnover volume and value respectively.
Commenting on the performance of the market, Cordros capital, said they expect the bulls to retain dominance in the market in the short term.
“In the short term, we expect the bulls to retain dominance in the market given positioning for 2021 FY dividends as institutional investors continue to search for clues on the direction of yields in the fixed income market. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings”.
On the other hand, analysts at Afrinvest, said, “In the coming week, we expect market performance to be a mix of profit-taking and bargain hunting activities.