Again, Internet Searches Remain Impotent on Nigerian Stock Turnover Volume

Again, Internet Searches Remain Impotent on Nigerian Stock Turnover Volume

In many parts of the developed world, investors and public searches on the Internet have been discovered to have profound impacts on the performance of the brands listed on stock exchange commissions. Researches conducted in this world have shown the extent to which the volume of searching specific information about a brand, issue or need affected stocks of the company. While this occurred in the developed world, a number of studies in the developing world have revealed that this is not tenable absolutely.

In a recent study, it was found that “Google searches neither explain the contemporaneous nor predict stock return, trading volume and volatility dynamics in Nigeria.” The study further hints that “trading volume and volatility dynamics have no relationship with changes in the numbers of Wikipedia pages view related to stock activities.” These results are advanced by our analyst with the use of the four weeks trading activities of the Nigerian Stock Exchange in January, 2021.

According to the Stock Exchange Commission at the end of first week of the month [January 8, 2021], “a total turnover of 3.394 billion shares worth N19.867 billion in 26,808 deals were traded. The Consumer Goods Industry (measured by volume) led the activity chart with 2.026 billion shares valued at N7.503 billion traded in 4,031 deals; thus contributing 59.70% and 37.77% to the total equity turnover volume and value respectively. The Financial Services Industry followed with 939.288 million shares worth N7.820 billion in 14,020 deals. The third place was Conglomerates Industry, with a turnover of 139.882 million shares worth N182.151 million in 885 deals.”

Second Week [January 15, 2021]

A total turnover of 3.447 billion shares worth N32.725 billion in 30,327 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 3.394 billion shares valued at N19.867 billion that exchanged hands last week in 26,808 deals. The Financial Services Industry (measured by volume) led the activity chart with 1.714 billion shares valued at N13.352 billion traded in 15,102 deals; thus contributing 49.74% and 40.80% to the total equity turnover volume and value respectively. The Construction/Real Estate Industry followed with 768.131 million shares worth N4.203 billion in 430 deals. The third place was Conglomerates Industry, with a turnover of 279.799 million shares worth N578.694 million in 1,199 deals. Trading in the top three equities namely UPDC Real Estate Investment Trust, Mutual Benefits Assurance Plc and Transnational Corporation of Nigeria Plc (measured by volume) accounted for 1.224 billion shares worth N4.459 billion in 929 deals, contributing 35.52% and 13.63% to the total equity turnover volume and value respectively.

Third Week [January 29, 2021]

A total turnover of 2.570 billion shares worth N27.884 billion in 31,466 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 4.288 billion shares valued at N25.989 billion that exchanged hands last week in 32,849 deals. The Financial Services Industry (measured by volume) led the activity chart with 1.497 billion shares valued at N12.695 billion traded in 14,324 deals; thus contributing 58.22% and 45.53% to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 363.263 million shares worth N821.428 million in 1,722 deals. The third place was Consumer Goods Industry, with a turnover of 220.759 million shares worth N3.953 billion in 5,952 deals. Trading in the top three equities namely Transnational Corporation of Nigeria, Union Bank of Nigeria Plc and Zenith Bank Plc (measured by volume) accounted for 633.261 million shares worth N5.634 billion in 3,947 deals, contributing 24.64% and 20.20% to the total equity turnover volume and value respectively.

Fourth Week [January 22, 2021]

A total turnover of 4.288 billion shares worth N25.989 billion in 32,849 deals were traded this week by investors on the floor of the Exchange, in contrast to a total of 3.447 billion shares valued at N32.725 billion that exchanged hands last week in 30,327 deals. The Financial Services Industry (measured by volume) led the activity chart with 2.607 billion shares valued at N12.454 billion traded in 15,128 deals; thus contributing 60.81% and 47.92% to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 813.813 million shares worth N1.561 billion in 2,417 deals. The third place was Oil and Gas Industry, with a turnover of 212.126 million shares worth N821.978 million in 2,726 deals. Trading in the top three equities namely Transnational Corporation of Nigeria, Living Trust Mortgage Bank Plc and Japaul Gold and Ventures Plc (measured by volume) accounted for 1.582 billion shares worth N1.564 billion in 2,726 deals, contributing 36.9% and 6.02% to the total equity turnover volume and value respectively.

In our analysis of the turnover volume extracted from the above submission by the Commission, our analyst discovers that 649,019,968 was the minimum turnover volume that occurred due to the Internet search activities [related to the companies listed on the Exchange and social indices] out of 13,698,947,479 volume recorded during the 20 days trading activities when more than 3.9 million Internet search volume was achieved. Over 708,000 was found as the maximum turnover volume. Analysis further reveals that strong connection does not exist between the search and turnover volume, emphasizing previous results of researchers in the academic community. The duo only connected by 3.6% and the search volume had 0.1% capacity of influencing the turnover volume.

Our analyst notes that the results are not surprising because attention was paid on seeking information about sports, life and style more than business, health, education, crime and politics. Information categories the public sought, according to our analyst, do not have an absolute direct link with the products and services of the companies listed on the Exchange Commission. Our analyst also notes that the results can also be understood within the context of the lack of robust search of products or services being offered by the companies. This can be linked with the low marketing activities of the companies during the trading period.

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