Mixed Sentiments Expected In Equities Trading This Week

Analysts have anticipated mixed sentiments in the Nigerian equities market as investors hunt for attractive dividend-paying stocks amid the possibility of profit-taking activities on stocks that have recently experienced notable appreciation.

The benchmark index has sustained its upward momentum and the bullish trend was underpinned by several key factors, including a favourable market breadth, notwithstanding profit-taking activities in select blue-chip stocks.

Additionally, the recent ruling from the presidential election tribunal and the decline in money market rates subsequent to the last treasury bills auction played pivotal roles in propelling the All-Share Index (ASI) to reach a new all-time high, surpassing the psychologically significant 68,000 points threshold.

Analysts Optimism

In the new week, analysts at Cowry Assets Management Limited said: “market sentiment is likely to be diverse as investors engage in bargain hunting ahead of the highly anticipated half-year earnings reports. Our attention will be keenly directed towards major players, especially tier-one banks, with expectations of robust earnings.

“However, the guidance provided by these firms might temper optimism, given ongoing portfolio reshuffling for quarter-end and sector rotation dynamics. On the economic front, we’ll closely monitor inflation data from the NBS, which is projected to remain elevated, potentially prompting further interest rate adjustments by the CBN at its upcoming MPC meeting later this month. Meanwhile, we continue to advise investors on taking positions in stocks with sound fundamentals.”

Cordros Securities Limited stated that, “we anticipate mixed sentiments in the market as we believe investors will hunt for attractive dividend-paying stocks amid the possibility of profit-taking activities on stocks that have recently experienced notable appreciation.

“Notwithstanding, we reiterate that investors should seek trading opportunities in fundamentally sound stocks as the weak macroeconomic story remains a significant headwind to corporate earnings.”

On market outlook, the chief operating officer of InvestData Consulting Limited, Mr. Ambrose Omordion said: “we expect mixed sentiment as bargain hunters hit the market ahead of the expected half-year earnings reports of UBA, Access Holdings and Zenith Bank in the midst portfolio reshuffling for quarter end and sector rotation.

“We note that discerning investors have continued to target fundamentally sound companies and defensive stocks to protect their portfolios. As such, investors should take advantage of price rally to take profit, while also looking at the trends and events across the globe and domestically.”

Last Week’s Trading Activities

The domestic equities market closed positively last week, as bargain hunting on BUA Foods, Zenith Bank and Dangote Sugar Refinery supported market performance.

As a result, the All-Share index advanced by 0.91 per cent to close the week at 68,143.34 points. Similarly, market capitalisation gained N337 billion week-on-week (W-o-W) to close at N37.295 trillion.

Elsewhere, sectoral performance was mixed as the NGX Banking index recorded a weekly gain of 5.5 per cent, while NGX Consumer Goods index up by 2.2 per cent. On the other side, the NGX Insurance index posted a weekly loss of 2.9 per cent. NGX Industrial Goods index shed by 0.5 per cent and NGX Oil & Gas index declined by 0.1 per cent for the week.

Also, market breadth for the week was positive as 52 equities appreciated in price, 35 equities depreciated in price, while 68 equities remained unchanged. CWG led the gainers table by 44.14 per cent to close at N5.78, per share. Tantalizers followed with a gain of 39.39 per cent to close at 46 kobo, while Oando went up by 38.74 per cent to close to N7.70, per share.

On the other side, Chellarams led the decliners table by 18.77 per cent to close at N2.90, per share. Cornerstone Insurance followed with a loss of 11.43 per cent to close at N1.24, while Consolidated Hallmark Insurance declined by 11.30 per cent to close at N1.02, per share.

Overall, a total turnover of 2.644 billion shares worth N45.450 billion in 44,189 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 2.510 billion shares valued at N32.816 billion that exchanged hands last week in 40,736 deals.

The Financial Services Industry (measured by volume) led the activity chart with 1.587 billion shares valued at N20.896 billion traded in 18,686 deals; thus contributing 60.03 per cent and 45.98 per cent to the total equity turnover volume and value respectively. The Oil and Gas Industry followed with 385.514 million shares worth N4.678 billion in 4,579 deals, while the Consumer Goods Industry pulled a turnover of 221.578 million shares worth N12.668 billion in 8,919 deals.

Trading in the top three equities; Oando, Fidelity Bank and United Bank for Africa (UBA) accounted for 732.276 million shares worth N7.148 billion in 7,020 deals, contributing 27.70 per cent and 15.73 per cent to the total equity turnover volume and value respectively.