Stocks To Trade Cautiously As Investors Weigh Profit-Taking Against Bargain Hunting

The Nigerian stock market is expected to trade cautiously in the near term as investors balance profit-taking with selective bargain hunting in fundamentally strong stocks.

Analysts noted that trading is likely to remain stock-specific, with investor sentiment and economic developments shaping market direction.

On market outlook for the week, Cowry Assets Management Limited said, “the equities market is expected to trade cautiously in the near term as investors balance profit-taking with selective bargain hunting in fundamentally strong stocks.

“While attractive fixed-income yields may continue to divert some funds from equities, sustained interest in quality stocks and positive corporate fundamentals should support market activity. Consequently, trading is likely to remain stock-specific, with investor sentiment and economic developments shaping market direction.”

Cordros Securities Limited added that “we expect market activity to remain cautious and largely range-bound in the near term, given the lack of a meaningful catalyst to spur buying interest.”

Profit-taking dominated the Nigerian equities market last week as investors consolidated recent gains across select large-cap stocks.

The benchmark NGX All-Share Index (ASI) declined by 2.80 per cent week-on-week to close at 243,379.63 points, while market capitalisation shed N4.41 trillion to close the week at N156.09 trillion. Consequently, the market’s year-to-date return moderated to 56.40 per cent, reflecting sustained but cautious investor confidence in the domestic equities market.

Market breadth remained weak, closing negative with 21 advancing stocks against 68 decliners. This reflects a predominantly selective and stock-specific trading environment, where gains were concentrated in a limited number of counters amid the broader market downturn.

International Energy Insurance led the gainers’ table, rising 60.62 per cent to close at N7.26 per share. Abbey Mortgage Bank followed with a gain of 47.24 per cent to close at N9.35, while Tripple Gee and Company went up by 9.80 per cent to close at N4.37 per share.

On the other side, Associated Bus Company led the decliners table by 24.73 per cent to close at N6.21 per share. University Press followed with a 17.07 per cent loss to close at N5.10, while Eterna declined 12.92 per cent to close at N30.00 per share.

Meanwhile, a total of 3.966 billion shares, worth N175.659 billion, were traded last week by investors on the floor of the Exchange, in contrast to a total of 2.398 billion shares valued at N111.480 billion that exchanged hands the previous week in 241,313 deals.

The Financial Services Industry led the activity chart, with 2.690 billion shares valued at N69.975 billion traded in 134,882 deals, contributing 67.83 per cent to the total equity turnover volume and 39.84 per cent to the total equity turnover value.

The Services Industry followed with 323.601 million shares worth N6.443 billion in 25,906 deals, while the ICT Industry pulled a turnover of 176.039 million shares worth N27.892 billion in 40,837 deals.

Trading in the top equities, Access Holdings, Abbey Mortgage Bank and Sterling Financial Holdings Company accounted for 1.290 billion shares worth N17.560 billion in 17,768 deals, contributing 32.53 per cent and 10.00 per cent to the total equity turnover volume and value, respectively.