Stocks This Week: Positive inflation data suggest Nigerian equities heading out of stormy days

Still facing pressure from a gale of share disposal which buffeted equity market for the larger part of the year’s first half, Nigerian stocks posted two positive sessions this week, while the rest three ended in red.

The weight of the depressed trading is most damaging on industrial goods and bank stocks, two sectors yet to deliver positive returns of the exchange’s five sector indexes, whereas oil and gas equities have garnered nearly 50 per cent appreciation between them since the year began.

The release on Friday of June’s inflation figures showed a mild decline in cost of living, its third monthly decline, with headline inflation at 17.75 per cent.

A fall in bond interest rates is likely to follow in the week ahead, pushing potential investors in that market to look the way of stocks and asset managers to reallocate fixed income fund to equities.

Yet, the winning factor for stocks appears to rest in the combined force inflows of fixed income cash and the prospect of largely positive companies quarterly results on trade, and that could be pivotal for a market that has shed 5.77 per cent so far this year.

All the key market performance indicators contracted this week. Market breadth ended in the negative, drawing 32 laggards against 29 gainers.

The all-share index and market capitalisation both weakened by 0.12 per cent.

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Trade volume of 1.008 billion shares estimated at N10.923 billion was recorded in 17,297 deals, relative to the 1.348 billion shares worth N12.140 billion that were traded in 21,581 deals last week.

The financial services sector topped the activity table, with 732.418 million shares valued at N7.213 billion and traded in 9,131 deals. It added 72.62 per cent and 66.04 per cent to the total equity volume and value respectively.

The conglomerates industry came next, trading 52.931 million shares estimated at N170.271 million in 656 deals. The ICT industry was third, trading 52.716 million shares priced at N1.806 billion in 701 deals.