Analysts anticipate a mixed performance on the Nigerian equities market this week as investors search for attractive entry points.
The decline seen in the market last week was primarily driven by widespread sell-offs across most sectors, with the exception of the consumer goods space. Market sentiment throughout the week remained mixed, with both buying and selling activities taking place, reflecting the uncertainty investors are currently grappling with.
This period of volatility was spurred by portfolio realignment, as market participants reassessed their positions in light of the latest macroeconomic data, particularly the consumer price inflation report for December 2024, which showed inflation at a concerning 34.80 per cent.
Analysts Optimism
Looking ahead to the new week, Cowry Assets Management Limited said, “it is anticipated that the market may experience a mixed performance in the coming week. While some degree of bargain hunting is expected as investors search for attractive entry points, much of the direction will be shaped by the anticipated earnings reports and the broader macroeconomic outlook.
“Despite the challenges presented by this week’s market pullbacks, which were largely driven by profit-taking and sell-offs, there may be buying opportunities for discerning investors. These opportunities are especially apparent for those who are looking to capitalize on low valuations and market volatility ahead of the upcoming Q4 earnings season.
“The combination of mixed macroeconomic data and a series of anticipated economic events, such as the upcoming Monetary Policy Committee (MPC) meeting, is likely to continue influencing market dynamics. In this environment, it is crucial for investors to focus on stocks with strong fundamentals, as these are more likely to weather the current economic challenges and offer better long-term prospects.”
Afrinvest Limited noted that, “in the coming week, we anticipate the bourse to post mild gain, spurred by bargain opportunities in stocks with substantial price correction in recent weeks.”
Last Week’s Trading Activities
The Nigerian stock market closed bearish in three out of five trading sessions last week. The All-Share Index gained dipped by 2.94 per cent week-on-week (W-o-W) to close at 102,353.68 points. Likewise, market capitalisation shed by N1.45 trillion to close the week at N62.851 trillion.
Sectoral performance last week was lackluster. The NGX Consumer Goods index was the only exception, posting a positive gain of 1.33 per cent week on week.
On the contrary, the NGX Industrial and NGX-Insurance sectors suffered the steepest declines, losing 8.20 per cent and 6.23 per cent week on week, respectively. The NGX Oil & Gas and NGX Banking sectors lost 0.78 per cent and 0.46 per cent week on week, respectively.
The market breadth for the week was negative as 33 equities appreciated in price, 57 equities depreciated in price, while 62 equities remained unchanged. NEIMETH International Pharmaceuticals led the gainers table by 31.42 per cent to close at N3.43, per share. SCOA Nigeria followed with a gain of 20.39 per cent to close at N2.48, while Northern Nigeria Flour Mills went up by 19.54 per cent to close to N54.45, per share.
On the other side, Universal Insurance led the decliners table by 19.23 per cent to close at 63 kobo, per share. Royal Exchange followed with a loss of 18.35 per cent to close at 89 kobo, while Regency Assurance declined by 17.78 per cent to close at 74 kobo, per share.
Overall, a total turnover of 2.252 billion shares worth N58.831 billion in 63,657 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 4.698 billion shares valued at N85.043 billion that exchanged hands previous week in 72,562 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.371 billion shares valued at N22.274 billion traded in 26,114 deals; contributing 60.86 per cent and 37.86 per cent to the total equity turnover volume and value respectively.
The Consumer Goods industry followed with 253.536 million shares worth N15.244 billion in 8,869 deals, while the Services Industry pulled a turnover of 193.424 million shares worth N931.795 million in 4,716 deals.
Trading in the top three equities; Universal Insurance, Guaranty Trust Holding Company (GTCO) and AIICO Insurance (measured by volume) accounted for 468.315 million shares worth N9.007 billion in 3,568 deals, contributing 20.79 per cent and 15.31 per cent to the total equity turnover volume and value respectively.
