Analysts expect the bearish sentiments to remain predominant this week on the Nigerian stock market in the absence of any positive triggers.
Analysts Optimism
On market outlook, the chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion, stated that, “we expect mixed sentiments to continue on portfolio repositioning and bargain hunting in the midst of expected macroeconomic data and election uncertainty, as investors are taking advantage of the low prices to reposition ahead Q3 GDP report and year end seasonality.”
According to Cordros Securities Limited, “this week, we expect bearish sentiments to remain predominant next week in the absence of any positive triggers to turn the tide for Nigerian equities. Nonetheless, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.”
Going into the new week, Cowry Assets Management Limited expected the market to trade in the bullish region despite the absence of a major trigger that is likely to drive activities in the market for investors seeking alpha.
“However, we continue to advise investors to trade on companies’ stocks with sound fundamentals and a positive outlook amid the macro-dynamics which remains a headwind,” Cowry Assets said.
Also, analysts at Afrinvest Limited noted that, “in the next trading week, we anticipate an extended bearish performance as market remains short of sustainable positive triggers.”
Last Week’s Trading Activities
Activities in the domestic bourse took a negative turn last week as the loss recorded on the second trading day proved sufficient in wiping off the cumulative gain as of Friday.
Precisely, the All-Share Index declined by 0.68 per cent week-on-week (W-o-W) to close at 43,968.75 points, driven by sell-offs in Guinness Nigeria, Flour Mills of Nigeria, Nigerian Breweries, MTN Nigeria Communications (MTNN) and Dangote Cement Plc. Similarly, market capitalisation shed N164 W-o-W to close at N23.949 trillion.
Elsewhere, the performances across sectors were broadly negative. The NGX Insurance index recorded a weekly loss of 2.2 per cent. NGX Consumer Goods index declined by 1.9 per cent, while NGX Oil and Gas (-0.7%), and NGX Industrial Goods indices depreciated by 0.7 per cent and 0.3 per cent respectively W-o-W. on the other hand, NGX Banking index gained 0.2 per cent.
The market breadth for the week was negative as 27 equities appreciated in price, 36 equities depreciated in price, while 94 equities remained unchanged. Unity Bank led the gainers table by 35.71 per cent to close at 57 kobo, per share. Royal Exchange followed with a gain of 22.22 per cent to close at 88 kobo, while MRS Oil Nigeria went up by 9.83 per cent to close to N12.85, per share.
On the other side, Prestige Assurance led the decliners table by 15.22 per cent to close at 39 kobo, per share. Learn Africa followed with a loss of 10.71 per cent to close at N1.50, while Guinness Nigeria declined by 9.95 per cent to close at N74.65, per share.
Overall, a total turnover of 1.101 billion shares worth N11.714 billion in 15,697 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 1.410 billion shares valued at N15.510 billion that exchanged hands previous week in 19,025 deals.
The Financial Services Industry (measured by volume) led the activity chart with 859.019 million shares valued at N6.691 billion traded in 8,157 deals; contributing 78 per cent and 57.12 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 96.989 million shares worth N109.622 million in 425 deals, while the Oil & Gas Industry traded a turnover of 40.897 million shares worth N367.117 million in 1,065 deals.
Trading in the top three equities; Access Holdings, Sterling Bank and Transnational Corporation (Transcorp) accounted for 577.512 million shares worth N2.761 billion in 1,132 deals, contributing 52.44 per cent and 23.57 per cent to the total equity turnover volume and value respectively.
