Economy

GDP expands as stock market decline due to profit taking

Published

4 years ago

May 23, 2022

Latest data from the National Bureau of Statistics (NBS) has said that the Nigerian economy expanded for the sixth consecutive quarter in first quarter of 2022 with a real Gross Domestic Product (GDP) growth of 3.1% y/y (to ₦17.6tn) as against a 0.5% y/y expansion in first quarter of 2021. Meanwhile, the Q1:2022 real GDP numbers represent a 15.0% moderation when compared to ₦20.7tn recorded in Q4:2021 amid elevated end-of-the-year activities. Disaggregated into component sectors, the non-oil sector GDP extended its stellar performance, expanding 6.1% y/y to beat both Q1 and Q4:2021 growth of 0.8% y/y and 4.7% y/y respectively. However, the oil sector GDP contracted by 26.0% y/y – the most in the last decade.

Meanwhile, profit-taking momentum extended at the stock market as the NGX-ASI declined 0.1% to 52,979.96 points due to sell pressure on PRESCO (-10.0%), GTCO (-0.8%), and WAPCO (-1.2%). Accordingly, YTD return moderated to 23.9% (previously 24.0%) while market capitalisation lost ₦36.9bn to ₦28.5tn. Trading activity varied as volume traded declined 39.7% to 263.3m units while value traded rose 10.2% to ₦3.6bn.

Across sectors within our purview, performance was mixed as 3 indices gained, 2 lost while the AFR-ICT index closed flat. Topping the gainers’ chart, the Oil & Gas index gained 28bps due to price uptick in CONOIL (+10.0%) and MRSOIL (+9.9%). Trailing, the Consumer Goods and Banking indices rose 5bps and 1bp respectively on the back of gains in UNILEVER (+1.0%), FLOURMILL (+0.5%), UBA (+0.6%), and STERLNBANK (+2.6%). However, losses in AIICO (-3.9%), NEM (-7.7%), WAPCO (-1.2%), and CUTIX (-0.7%) dragged the Insurance and Industrial Goods indices down 2.3% and 0.1% respectively.

Investor sentiment, as measured by market breadth, weakened to -0.03x from 0.05x as 22 stocks gained, 24 lost while 70 closed flat. In the next trading session, we expect investors to trade with caution in anticipation of the MPC meeting outcome. Nonetheless, we maintain a bearish outlook due weak sentiment.

Market Cap (₦’bn) 28,525.11

Market Cap ($’bn) 68.3

NGX All-Share Index 52,911.51

Daily Performance % -0.1%

WTD Performance % -0.1%

MTD Performance % 6.6%

QTD Performance % 12.7%

YTD Performance % 23.9%

Daily Volume 263.3

Daily Value (₦’bn) 3.5

Daily Value ($’m) 8.5

Sectoral Indices Performance