The Nigerian equities market’s negative trend persisted for a second week in a row, with investors losing more than N807 billion in the previous two weeks.
According to NGX trade data, market capitalisation decreased from N28.681 trillion on June 10th to N27.874 trillion at the close of business on Friday.
Market capitalization is a measure of the entire worth of investors on the Exchange.
The All Share Index (ASI), another important measure of the equities market, had a similar dip, falling from 53,201.38 points on June 10 to 51,705.61 points last Friday.
As a result, analysts have advised investors to exercise caution this week until corporations report their half-year financial results for the year 2022.
To reduce risk associated with price fluctuations, analysts urged investors to trade fundamentally sound stocks.
In the meanwhile, according to market activity last week, losses in the shares of major cement producers Dangote Cement and BUA Cement on the first trading day of the week cancelled out gains of 1.9% as of Friday, as the Nigerian Exchange Limited, or NGX, had its second straight weekly loss.
The All-Share Index thus closed at 51,705.61 points, down just 0.1% Week on Week. Notably, profit-taking actions resulted in losses in BUA Cement, which fell by 3.2%; Dangote Cement, which fell by 0.7%; Nigerian Breweries, which fell by 5.5%, and WAPCO, which fell by 3.2%.
As a result, the returns for the Month to Date (MtD) and the Year to Date (YtD) were respectively -2.4% and 21.0%. However, activity levels were higher than the previous week, as trade volume and value grew by 19.1% and 19.2%, respectively, week over week.
Analysts at Cordros Capital Limited commented on market activity by saying: “We expect the choppy trading pattern that took place last week to continue in the week ahead, as investors continue to cherry-pick stocks with attractive dividend yields, while at the same time remaining cautious about leaving gains in the market. Despite this, we encourage investors to only invest in fundamentally sound equities, because the weak economic narrative continues to be a major drag on corporate earnings.
“Investors are advised to trade on companies’ stocks with good fundamentals and a positive outlook so as to avoid falling into the bear trap.”