Nigerian Exchange Weekly Report: Equity Declines as ETPs SurgeWeek of August 12-16, 2024

Last Updated on 28 November 2024 by Naijadazz

The Nigerian Exchange experienced contrasting trends in its equity and Exchange Traded Products (ETP) segments for the week ending August 16, 2024. While the equity market saw a decline in both volume and value, the ETP segment recorded significant growth.

Equity Market Performance:

• Total turnover: 2.033 billion shares (↓24.1% week-on-week)
• Value: N42.155 billion (↓14% week-on-week)
• Number of deals: 45,157 (↓4.8% week-on-week)

Sector Analysis:

1. Financial Services: Led with 67.73% of volume and 60.85% of value
2. Oil and Gas: Second with 13.6% of volume and 14.3% of value
3. Services: Third with 5% of volume and 1.6% of value

Top Performers:
Guaranty Trust Holdings Company Plc, Veritas Kapital Assurance Plc, and Japaul Gold & Ventures Plc collectively accounted for 33.16% of volume and 38.08% of value.

Daily Trading Pattern:

• Highest volume: Tuesday (599.25 million shares)
• Lowest volume: Thursday (271.26 million shares)
• Highest value: Tuesday (N13.92 billion)
• Lowest value: Thursday (N3.52 billion)

Market Breadth:
Mixed performance throughout the week, with Friday showing a slightly bullish trend (23 advancers vs. 22 decliners).

ETP Segment Performance:

• Total units traded: 149,795 (↑635% week-on-week)
• Value: N7.995 million (↑35.2% week-on-week)
• Number of deals: 139 (↓6.1% week-on-week)

Top ETP Performers:

1. VETGRIF30: Dominated with 91.8% of volume and 61.4% of value
2. MERVALUE and MERGROWTH: Led in number of deals (39 and 40 respectively)

Analysis and Implications:

1. Sector Rotation: The decline in equity trading coupled with the surge in ETPs suggests a possible shift in investor strategy towards more diversified, index-based products.
2. Market Sentiment: The overall decrease in equity trading volume and value may indicate cautious investor sentiment, possibly due to macroeconomic factors or geopolitical concerns.
3. Liquidity Concentration: The dominance of the Financial Services sector and the top three equities points to a concentration of liquidity in specific market segments.
4. ETP Growth: The substantial increase in ETP trading, particularly in VETGRIF30, could signal growing investor interest in thematic or sector-specific investment products.
5. Trading Efficiency: Despite lower volumes, the relatively smaller decrease in deal count suggests improved trading efficiency in the equity market.

Outlook:
The divergent trends between equities and ETPs warrant close monitoring. If sustained, this could indicate a structural shift in the Nigerian capital market, with potential implications for market development, product innovation, and regulatory considerations.

This comprehensive analysis provides a nuanced view of the Nigerian Exchange’s performance, highlighting key trends and their potential implications for investors, regulators, and market participants.

Related posts:

July 2024 CPI Report: Nigeria’s Inflation Decline Offers Hope Amid Ongoing Challenges Nigerian Exchange Rebounds in May, Led by Chemical and Allied Products, Tantalizers, and Presc TotalEnergies Jumps N84.20 This Week: Nigerian Market Rally Intensifies (August 17, 2024) Nigerian Equity Market Sees Decline in Trading Volume and Value for Week Ending August 16, 2024 Nigerian Exchange Weekly Bond Market Report – Week of August 12-16, 2024