Weak Investors’ Sentiment To Dampen Equities Performance

Capital market analysts have predicted weak investors’ sentiments to continue on the Nigerian stock market this week.

According to them, the seeming lull in the market that has been revealed by the volume patterns in recent weeks in the face of better than expected corporate earnings resulted from low liquidity in the market and the economy due to rate hike.

Nevertheless, they believe the current state of the market provides huge opportunities for position traders, as smart money is likely to hit the market any moment from now, amid ongoing interpretation of the recently released Consumer Price Index and corporate earnings by institutional investors and others are ongoing.

Analysts View

This week, analysts at Cordros Securities Limited said: “We expect market performance to remain mixed in the coming week as investors rotate their portfolios towards stocks with attractive dividend yields, which could be matched by intermittent profit-taking activities.
“Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.”
Going into the new week, analysts at Cowry Assets Management Limited anticipated mixed sentiments to drive trading as investors continue exhibiting minimal apathy towards risk assets like equities. However, they advised investors to trade on companies’ stocks with sound fundamentals and a positive outlook.
On its part, GTI Securities Limited noted that, “the market ends activities for last week on a negative note,we expect mixed sentiments to continue next week.”
However, Afrinvest Limited is optimistic about the stock market this week, saying, ‘we anticipate bargain hunting activities to dominate as investors cherrypick relatively attractive stocks.’

Last Week’s Trading Activities

The local stock market last week was not immune to the rout in global equities, as bearish sentiments persisted for the second consecutive week.
Accordingly, the All-Share Index shed 0.59 per cent week-on-week (W-o-W) to close at 49,370.62 points.
Similarly, market capitalisation shed N158 billion to close the week at N26.629 trillion. Particularly, sell-offs in bellwether stocks, Okomu Oil, Presco, Access Holdings and Lafarge Africa drove drove the weekly loss.
Sectoral performance was mixed, as the Banking index recorded a weekly gain 0.7 per cent. Consumer Goods index up 3.0 per cent and Industrial Goods index rose by 0.3 per cent W-o-W.
On the othe hand, the Insurance index dipped by 1.4 per cent, while Oil & Gas index shed 0.9 per cent W-o-W. The market breadth for the week was negative as 21 equities appreciated in price, 41 equities depreciated in price, while 94 equities remained unchanged. Prestige Assurance led the gainers table by 18.18 per cent to close at 52 kobo, per share.
Neimeth International Pharmaceuticals followed with a gain of 9.29 per cent to close at N1.53, while Sovereign Trust Insurance went up by 8.00 per cent to close to 27 kobo, per share.
On the other side, Japaul Gold & Ventures led the decliners table by 23.68 per cent to close at 29 kobo, per share. Courteville Business Solutions followed with a loss of 21.43 per cent to close at 44 kobo, while University Press declined by 18.87 per cent to close at N1.72, per share.
Overall, a total turnover of 823.005 million shares worth N12.228 billion in 17,482 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 1.511 billion shares valued at N13.547 billion that exchanged hands previous week in 20,074 deals.
The Financial Services Industry (measured by volume) led the activity chart with 561.683 million shares valued at N5.576 billion traded in 8,388 deals; contributing 68.25 per cent and 45.60 per cent to the total equity turnover volume and value respectively.
The ICT Industry followed with 91.819 million shares worth N1.478 billion in 1,532 deals, while the Consumer Goods Industry tradaed a turnover of 42.546 million shares worth N3.396 billion in 2,639 deals. Trading in the top three equities namely FBN Holdings (FBNH), e-Tranzact International and United Bank for Africa (UBA) accounted for 323.474 million shares worth N2.520 billion in 1,457 deals, contributing 39.30 per cent and 20.61 per cent to the total equity turnover volume and value respectively.