Last week, despite the positive feelers across the globe, bearish sentiment prevailed across major markets around the globe as investors dump equities assets for safe havens. Last week, the domestic bourse recorded a marginal loss as the benchmark index fell 0.1% w/w to print at 47,140.5 points.
In the Nigerian market, the Year-to-Date (YTD) return moderated to 10.4 per cent (previously 10.5 per cent) while market capitalisation fell N29.5 billion week-on-week (w/w) to settle at N25.4 trillion. Average volume and value traded increased 22.7 per cent and 50.8 per cent w/w to 326.6 million units and N5.7 billion respectively.
Across sectors within our purview, performance was bearish as four out of six indices declined. Topping the laggards’ chart, the Oil & Gas and Banking indices lost 3.4 per cent and 0.7 per cent w/w respectively, following sell pressure on SEPLAT (-5.9 per cent), OANDO (-2.0 per cent), STERLING (-5.8 per cent), and ETI (-4.0 per cent).
Likewise, the Industrial Goods and AFR-ICT indices shed 0.3 per cent and 0.1 per cent w/w sequentially on price decline in WAPCO (-1.3 per cent), DANGCEM (-0.5 per cent), AIRTELAF (-0.9 per cent), and CWG (-9.8 per cent). In contrast, the Consumer Goods and Insurance indices outperformed the broad market, up 2.3 per cent and 1.0 per cent w/w respectively due to price appreciation in GUINNESS (+15.7 per cent), PZ (+5.4 per cent), NEM (+20.8 per cent), and MBENEFIT (+7.7 per cent).
It was expected that the bulls would reign last week following development across the globe, but turned out differently. For instance, the US secretary of state, Antony Blinken, hinted that the US has accepted invitation to meet with Russia’s foreign minister to discuss on diplomatic solution to the standoff between Russia and Ukraine. This move by the US raised hope of a near term de-escalation of the tension which had in recent weeks dragged global commodities prices to new highs.
In Euro Area, the ECB reported a Current Account (CA) surplus of €310.0bn (2.6 per cent of Euro Area GDP) in 2021 relative to €213.0bn (1.9 per cent of Euro Area GDP) in 2020. The improvement was largely driven by higher surpluses in services and primary income. On price level front, Japan’s inflation slowed to 0.2 per cent y/y in January 2022 from 0.5 per cent in December 2021, thereby, boosting the likelihood that the country’s central bank may extend dovish policy measures.
“This week, we expect concerns about the geopolitical tension between Ukraine and Russia, economic variables, and corporate earnings releases to shape market performance”, said analysts at Afrinvest.
