Analysts have said, the Nigerian stock market is expected to close positive this week as investors increase bargain hunting activities and positioning ahead of first quarter (Q1) corporate earnings inflow.
Sell-sentiments in some of the mid and large tickers continued for the sixth straight weeks of negative performance on the domestic equities market despite the rekindled buying interest of investors with increased bargain hunting activities as well as more position-takings ahead of more Q1 corporate earnings inflow witnessed recently in the local bourse.
Also, the market volatility remains at the extreme majorly driven by mixed sentiments while investors continue to seek safer investment haven as hedge against inflation in the face of attractive fixed income yields.
Analysts Optimism
Analysts at Cordros Securities Limited said: “this week, we expect the NGX’s floor to be flooded with results as the Q1, 2023 earnings season commences in full swing. Thus, we expect decent earnings releases across board to temper selling activities and support positive sentiments on the bourse.
“In the medium term, we expect investors’ sentiments to be influenced by developments in the macroeconomic landscape and the movement of yields in the fixed-income space. Overall, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.”
In the week to come, Cowry Assets Management Limited expected “the current trend to linger if the selling sentiment among the highly priced stocks moderates and liquidity in the market improve further on dividend payment as more and more companies hold their Annual General Meeting for shareholders to approve payment. However, we continue to advise investors to trade on companies’ stocks with sound fundamentals and a positive outlook.”
On its part, Afrinvest Limited said: “in the coming week, we expect a positive performance on the local bourse as investors hunt for bargains amid improved sentiment.”
The local stock market witnessed another subdued performance despite closing marginally higher on three out of the four trading sessions last week.
The downward slide was primarily due to sell pressures on MTN Nigeria Communications (MTNN), amid strong bargain hunting on Access Holdings and Transnational Corporation (Transcorp).
Eventually, the All-Share Index rose by 1.04 per cent week-on-week to close at 51,355.74 points. Similarly, market capitalisation rose by N304 billion W-o-W to close at N27.963 trillion.
Sectoral performance was largely bearish. NGX Banking index recorded a weekly decline of 2.5 per cent. NGX Oil and Gas index down by 1.4 per cent and NGX Industrial Goods index down by 0.2 per cent W-o-W. On the other hand, NGX Insurance index rose by 1.4 per cent, while NGX Consumer Goods gained 0.2 per cent for the week.
Market breadth for the week was positive as 35 equities appreciated in price, 31 equities depreciated in price, while 90 equities remained unchanged. Transcorp led the gainers table by 44.97 per cent to close at N2.45, per share. Ikeja Hotel followed with a gain of 19.83 per cent to close at N1.39, while Consolidated Hallmark Insurance went up by 15.79 per cent to close to 66 kobo, per share.
On the other side, Zenith Bank led the decliners table by 12.20 per cent to close at N21.95, per share. Champion Breweries followed with a loss of 10.14 per cent to close at N4.43, while Africa Prudential declined by 10 per cent to close at N5.40, per share.
Overall, a total turnover of 3.920 billion shares worth N15.620 billion in 16,856 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 2.824 billion shares valued at N10.964 billion that exchanged hands last week in 15,686 deals.
The Conglomerates Industry (measured by volume) led the activity chart with 3.050 billion shares valued at N5.964 billion traded in 1,379 deals; contributing 77.81 per cent and 38.18 per cent to the total equity turnover volume and value respectively. The Financial Services Industry followed with 707.962 million shares worth N6.175 billion in 8,430 deals, while the Consumer Goods Industry traded a turnover of 43.155 million shares worth N1.026 billion in 2,223 deals.
Trading in the top three equities; Transcorp, Access Holdings and Fidelity Bank (measured by volume) accounted for 3.302 billion shares worth N7.999 billion in 2,375 deals, contributing 84.23 per cent and 51.21 per cent to the total equity turnover volume and value respectively.
