Analysts have predicted that there will be cautious trading in the nation’s stock market this week as bargain hunting continues, ahead of interim dividend season in the second half.
They also predicted the flow of funds into the fixed income segment based on the rate hike by the Central Bank of Nigeria (CBN), as sector rotation persists and players digest the macro-economic data and fourth quarter (Q4) unaudited earnings released so far.
Analysts are also on the lookout for the inflation rate of 17.71 per cent to support recovery in the new month amid oil prices oscillation. Also, the market continues to interpret the rising inflation in relation to the crude oil price and other factors, in the midst of profit-taking and portfolio rebalancing. This will result in market players targeting fundamentally sound and dividend-paying stocks in the hope of dividend announcements.
Analysts’ Comments
In the week ahead, analysts at Cordros Securities Limited said: “With the H1, 2022 earnings season on the horizon, we believe investors will be looking for clues on the sustainability of the decent corporate earnings released for Q1, 2022.
“However, we expect mixed market performance in the coming week as bargain hunting in stocks with attractive dividend yields will be matched by intermittent profit-taking activities. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”
Also, GTI Securities Limited said: “Domestic market closed slightly positive despite mixed sentiments recorded last week. We expect cautious trading to continue in the coming week.”
Cowry Assets Management Limited stated that “In the new week, we expect to see the expectations of Q2 numbers act as catalyst to trigger more bullish sentiments. Also, we continue to maintain positive sentiments in the market while investors are advised to trade on companies’ stocks with good fundamentals and a positive outlook so as to avoid falling into the bear trap.”
Last Week’s Trading Activities
Last week was a contested battle between the bulls and the bears as mixed sentiments dominated trading activities on the domestic bourse.
Eventually, the All-Share Index notched a 0.24 per cent week-on-week (W-o-W) gain to close at 51,829.67 points. Similarly, market capitalisation rose W-o-W by N67 billion to close at N27.942 trillion.
Notably, buying interests in Okomu Oil Palm, FBN Holdings (FBNH), Ecobank Transnational Incorporated (ETI) and International Breweries underpinned the market’s performance.
Sectoral performance was mixed as the Insurance and Banking indices recorded a gain of 3.6 per cent and 1.1 per cent respectively. On the other hand, the NGX Consumer Goods Index and NGX Industrial Index declined by 0.40 per cent and 0.13 per cent on a week-on-week comparison.
The market breadth for the week was positive as 34 equities appreciated in price, 29 equities depreciated in price, while 93 equities remained unchanged. John Holt led the gainers table by 30.16 per cent to close at 82 kobo, per share. Cornerstone Insurance followed with a gain of 20.97 per cent to close at 75 kobo, while Okomu Oil Palm went up by 12.09 per cent to close to N216.90, per share.
On the other side, P Z Cussons Nigeria led the decliners table by 18.40 per cent to close at N10.20, per share. University Press followed with a loss of 10.42 per cent to close at N2.58, while Prestige Assurance declined by 10 per cent to close at 36 kobo, per share.
Overall, a total turnover of 1.348 billion shares worth N24.487 billion in 22,155 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 1.121 billion shares valued at N13.703 billion that exchanged hands previous week in 22,350 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.009 billion shares valued at N6.796 billion traded in 11,352 deals; contributing 74.87 per cent and 27.75 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 79,616 million shares worth N144.549 million in 689 deals, while the Oil and Gas Industry traded a turnover of 72.996 million shares worth N1.862 billion in 1,799 deals.
Trading in the top three equities; Mutual Benefits Assurance, Living Trust Mortgage Bank and Guaranty Trust Holding Company (GTCO) accounted for 484.839 million shares worth N 2.414 billion in 2,410 deals, contributing 35.97 per cent and 9.86 per cent to the total equity turnover volume and value respectively.
TIP 0.44 10.00
Cutix 2.47 9.78
LinkAssure 0.57 9.62
JohnHolt 0.82 9.33
Caverton 1.11 8.82
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