Stock Market Likely To Remain Weak – Analysts

Capital market analysts expect the market to remain cautiously weak in the near term, with bearish sentiment and profit-taking continuing to weigh on performance.

The market ended last week on a weaker footing, reversing part of the previous week’s gains as declining investor confidence and subdued trading activity dampened upward momentum.

Looking ahead to the new week, Cowry Assets Management Limited said, “We expect the market to remain cautiously weak in the near term as bearish sentiment and profit-taking activities continue to weigh on performance.

“With market breadth still negative and trading volumes subdued, investors are likely to adopt a selective approach, focusing on fundamentally sound and defensive stocks. Thus, we continue to advise investors to take positions in fundamentally sound counters.”

Imperial Asset Managers Limited noted that “heading into the new week, we anticipate a cautiously optimistic trading pattern as fund managers and institutional investors finalise their end-of-month portfolio rebalancing. We advise our clients to take advantage of these dips by strategically positioning themselves in fundamentally sound, high-dividend-yielding stocks ahead of the upcoming earnings season.”

Last week, the local bourse closed on a bearish note with the NGX All-Share Index (ASI) shedding 1.1 per cent week-on-week (W-o-W) to close at 192,826.78 points. Similarly, the market capitalisation dropped by N1.40 trillion to close the week at N123.763 trillion.

Market breadth was negative, with 32 gainers against 69 decliners, reflecting broad-based selling pressure across counters. Fortis Global Insurance led the gainers’ table, rising 56.67 per cent to close at 94 kobo per share. Okomu Oil Palm followed with a gain of 20.92 per cent to close at N1,765.00, while Infinity Trust Mortgage Bank went up by 20.63 per cent to close at N19.00 per share.

On the other side, Associated Bus Company led the decliners table by 25.00 per cent to close at N6.75 per share. DAAR Communications followed with a 20.68 per cent loss to close at N2.11, while Tantalizers declined by 16.67 per cent to close at N4.50 per share.

Overall, a total of 5.494 billion shares, valued at N196.709 billion, were traded in 370,233 deals last week by investors on the floor of the Exchange, in contrast to a total of 7.662 billion shares valued at N252.566 billion that exchanged hands the prior week in 345,118 deals.

The Financial Services Industry led the activity chart, with 3.241 billion shares valued at N82.775 billion traded in 153,744 deals, contributing 58.99 per cent and 42.08 per cent to the total equity turnover volume and value, respectively.

The Oil and Gas Industry followed with 897.862 million shares worth N38.816 billion in 29,179 deals, while the Services Industry traded a turnover of 360.490 million shares worth N5.782 billion in 22,971 deals.

Trading in the top equities, Japaul Gold & Ventures, Fortis Global Insurance and Zenith Bank accounted for 1.576 billion shares worth N33.464 billion in 30,055 deals, contributing 28.68 per cent and 17.01 per cent to the total equity turnover volume and value, respectively.