Analysts Predict Cautious Trading, Investors Shift To Undervalued Stocks

Capital market analysts expected investors to adopt a cautious stance in the near term, prioritising fundamentally strong companies with attractive valuations.

The shift reflects growing selectivity amid ongoing macroeconomic uncertainty and elevated market volatility.

For this week, Cowry Assets Management Limited said, “the Nigerian equities market is expected to remain broadly positive in the near term, though gains may slow as investors take profits after the recent rally. Selective buying is likely to persist in strong sectors such as banking, industrial goods, and consumer stocks, while oil & gas and commodity counters may remain weak.

“Overall sentiment stays constructive, but volatility may increase as the market consolidates recent gains and reacts to macroeconomic developments.”

Futureview Group stated, “We expect investors to trade cautiously, focusing on fundamentally strong stocks with attractive valuations.”

The Nigerian equities market ended last week on a strong bullish note, as sustained gains in key counters drove overall market performance. The NGX All-Share Index (ASI) advanced by 2.27 per cent week-on-week to close at 250,330.92 points, while market capitalisation rose by N3.34 trillion to close the week at N160.444 trillion. Consequently, year-to-date returns strengthened to 60.87 per cent, underscoring continued positive investor sentiment.

Investor sentiment, as measured by market breadth, closed positively, with 74 stocks gaining, 24 losing, and 48 unchanged. Berger Paints led the gainers’ table, rising 55.57 per cent to close at N168.95 per share. SCOA Nigeria followed with a gain of 45.92 per cent to close at N33.05, while Daar Communications rose 42.41 per cent to close at N2.25 per share.

On the other side, Zichis Agro Allied Industries led the decliners table by 11.78 per cent to close at N29.43 per share. The Initiates Plc (TIP) followed with a loss of 10.03 per cent to close at N32.30, while NPF Microfinance Bank declined by 10.00 per cent to close at N5.76 per share.

Meanwhile, a total of 7.772 billion shares, valued at N374.040 billion, were traded in 402,945 deals last week by investors on the floor of the Exchange, compared to 7.075 billion shares valued at N324.351 billion in 474,436 deals the previous week.

The Financial Services Industry led the activity chart, with 4.774 billion shares valued at N196.352 billion traded in 153,515 deals, contributing 61.43 per cent to the total equity turnover volume and 52.49 per cent to the total equity turnover value.

The ICT Industry followed with 1.118 billion shares worth N57.825 billion in 44,622 deals, while the Services Industry traded 601.745 million shares worth N6.984 billion in 27,653 deals.

Trading in the top three equities, First HoldCo, United Bank for Africa (UBA) and Chams Holding Company accounted for 2.195 billion shares worth N99.820 billion in 30,056 deals, contributing 28.24 per cent and 26.69 per cent to the total equity turnover volume and value, respectively.