Stocks This Week: Subdued trading dampens hopes of resounding recovery

Tuesday through Friday, Nigerian equities posted minimal gains, helping the week return 1.23 per cent, but growth for the quarter and for the year so far remains negative, with investor confidence in the market too low to bring back activity to its pre-pandemic levels.

Foreign investors’ interest in Nigerian stocks substantially wore out in 2020 as April’s record oil crash staunched the flow of petrodollars into Africa’s biggest crude producer, which relies on the commodity for about 90 per cent of its foreign exchange earnings, making it hard for international investors to cash out.

Foreign capital inflow to the Nigerian bourse last year added up to N247 billion against N419 billion, according to the Nigerian Exchange data. That same year, foreign transactions touched their three-year low, sinking to just about a third of the turnover as the forex liquidity crisis kept investments from abroad at bay.

As rebound of Nigerian stocks shapes up slowly, traders’ greater focus will be on the half-year earnings of companies which will be due by the end of June, expecting that good results will stoke share value.

All the key market performance indicators improved this week. Market breadth was neutral as the bourse reported 33 gainers and laggards apiece.

The all-share index and market capitalisation simultaneously rose by 1.23 per cent, the former closing at 38,726.10 points and the latter at N20.185 trillion.

Trade volume of 1.082 billion shares estimated at N9.548 billion was recorded in 17,933 deals, relative to the 1.037 billion shares worth N9.471 billion that were traded in 17,577 deals the previous week.

The financial services sector led the activity chart, with 767.001 million shares valued at N4.356 billion and traded in 9,447 deals. It added 70.86 per cent and 45.63 per cent to the total equity volume and value respectively.

The oil and gas industry followed, trading 83.528 million shares estimated at N1.454 billion in 1,118 deals. The conglomerates sector was third, trading 72.813 million shares priced at N356.723 million in 781 deals.