- profit-taking to continue
By Chioma Obinagwam
The Nigerian Stock Exchange (NSE) has said it recorded 5.03 per cent improvement in its major measurement indicator- the NSE All-Share index at the close trading for the entire week ended June 8, 2017.
The weekly report of the NSE for period under review indicated.
According to the report, the NSE All-Share Index and Market Capitalization of listed equities on the Nigerian bourse appreciated by 5.03 per cent and 5.04 per cent to close the week at 38,669.23 and N14.008 trillion respectively.
“The NSE All-Share Index and Market Capitalization appreciated by 5.03% and 5.04% to close the week at 38,669.23 and N14.008 trillion respectively,” the report showed.
Thus, halting the seven consecutive weeks of negative/downward trend.
The rebound was largely as result of gains, trading in the volumes and values of most high cap and mid cap stocks, analysts at Afrinvest Limited, an indigenous wealth advisory firm disclosed.
Again, the report showed that all other indices finished higher with the exception of the NSE Insurance and NSE Oil/Gas Indices that depreciated by 0.61 per cent and 1.34 per cent respectively, while the NSE Alternative Securities Market(ASeM) Index closed flat.
Furthermore, a total turnover of 1.749 billion shares worth N31.183 billion in 24,604 deals were traded in the week by investors on the floor of the Exchange in contrast to a total of 2.699 billion shares valued at N84.775 billion that exchanged hands last week in 19,715 deals.
More extracts from the report showed that the Financial Services Industry (measured by volume) led the activity chart with 1.423 billion shares valued at N19.717 billion traded in 13,950 deals; thus contributing 81.37 per cent and 63.23 per cent to the total equity turnover volume and value respectively.
More so, the Consumer Goods Industry followed with 153.105 million shares worth N6.805 billion in 4,512 deals.
The third place was occupied by Conglomerates Industry with a turnover of 60.473 million shares worth N186.600 billion in 905 deals.
Trading in the Top Three Equities namely – Guaranty Trust Bank Plc, Access Bank Plc and Zenith Bank International Plc (measured by volume) accounted for 588.605 million shares worth N16.568 billion in 4,120 deals, contributing 33.65 per cent and 53.14 per cent to the total equity turnover volume and value respectively.
In all, 49 equities appreciated in price during the week, higher than 25 in the previous week whereas 29 equities depreciated in price, lower than 48 equities of the previous week evev as 91equities remained unchanged lower than the 94 equities recorded in the preceding week.
Similarly, a total of 202,916 units of Exchange Traded Products (ETPs) valued at N1.168 million executed in 19 deals were traded in the week under review compared with a total of 22,080 units valued at N393,726.30 that was transacted in the preceding week in 10 deals.
Moreso, a total of 10,561 units of Federal Government bonds valued at N10.381 million were traded in the week in 20 deals, compared with a total of 6,433 units valued at N6.599 million transacted last week in 12 deals.
Expectations for coming week:
The coming week is expected to continue with the profit-taking by investors, which began on the last trading day of the week under review (Friday June 8, 2018), analysts at Afrinvest Limited, predicted.
Recall that the Daily Official list of the NSE on Friday showed that the NSE All-Share index and the Market Capitalisation dipped by 0.96 per cent each to settle at 38,669.23 basis points (bps) and N14.008 trillion respectively, precipitated by profit-taking.
Profit taking is the act of selling stocks to take advantage of a sharp rise in the stock price.
“In the coming week, we expect to see sustained profit taking in early trades, however, we believe this negative trend will be reversed before the end of the week on account of bargain hunting by investors,” Afrinvest analysts noted.
Selling off shares often causes share price decline, at least temporarily and profit taking is witnessed when there is an upward trend in the overall market.
Recall that the Chief Relationship Officer at Foresight Securities and Investment limited, Charles Fakrogha had earlier in the week stated that the rally on the stocks will not be sustained because of lack of strong fundamentals to back it up.
“This rebound, this trend, is not going to be sustained for a very long time because there are no strong fundamentals to support what we’re experiencing in the market. It is just an issue of frequent buying and selling; that’s what we’re experiencing in the market today. However, as we begin to approach the end of the second quarter, maybe some investors are positioning themselves,” he disclosed.