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Nigeria: Stock Market Declines 2.5% On Profit Taking

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The stock market declined by 2.5 per cent last week following profit taking after weeks of sustained growth. The market, which spiked by 12.9 per cent the previous week, closed lower last week as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) shedding 2.5 per cent to be at 34,136.82. The market capitalisation closed lower at N17.838 trillion.

Despite the decline, analysts at Cordros Research said in the short to medium term, they still see scope for expansion in valuation multiples as the depressed yield environment remains compelling for yield-seeking investors to rebalance their portfolio towards equities.

“In the week ahead((this week), we expect a mixed market performance due to continued profit-taking activities and positioning by early birds in dividend-paying stocks ahead of full year (FY) 2020 dividend declarations. We reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings,” the analysts said.

Meanwhile, investors traded 11.4 billion shares worth N35.892 billion in 39,265 deals compared with 4.509 billion shares valued at N58.733 billion that exchanged hands in 47,140 deals the previous week. The Construction/Real Estate industry led the activity chart with 8.529 billion shares valued at N6.055 billion traded in 438 deals, thus contributing 74.8 per cent and 16.8 per cent to the total equity turnover volume and value respectively.

The Financial Services Industry followed with 1.991 billion shares worth N19.933 billion in 21,725 deals, just as the Conglomerates Industry occupied the third position with a turnover of 423.702 million shares worth N526.698 million in 1,962 deals. Trading in the top three equities namely UAC- Property Development Company Plc, Transnational Corporation of Nigeria Plc and Jaiz Bank Plc accounted for 9.259 billion shares worth N6.639 billion in 1,958 deals.