Analysts have said the bullish sentiment is expected to persist among investors in the Nigerian equities market this week on reaction to positive first half (H1), 2022 corporate releases.
They said, the prevailing market condition is creating ‘buy’ opportunities for discerning investors and traders that understand stock market dynamics, especially as these companies’ earnings performance beat market expectations to indicate their inherent value and the cheap state of these stocks.
Analysts Optimism
Analysts at Cordros Securities Limited expect that alpha-seeking investors will continue to seek trading opportunities in stocks of companies that delivered impressive earnings during the Q2, 2022 earnings season amid the yield uptick in the fixed income (FI) market.
“However, we think the absence of a near-term catalyst will likely skew overall market sentiments to the negative side, particularly as the political space gets heated. Notwithstanding, we reiterate the need for positioning in only fundamentally sound stocks as the unimpressive macro environment remains a significant headwind for corporate earnings,” they said.
Going into the new week, Cowry Assets Management Limited said: “earnings releases expectations from some of the major banks is expected to buoy trading activities as investors begin to rebalance their portfolios as we head into the final month of the third quarter.
“Thus, we expect the bullish camp to rule the market. However, we continue to advise investors to trade on companies’ stocks with sound fundamentals and a positive outlook.”
On market outlook, the chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion said: “we expect a mixed trend on increased buying interest in banking stocks and portfolio rebalancing on bargain hunting as players interpret macroeconomic data and impressive half-year results in expectation of more bank’s scorecards, especially from Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA) and Access Holdings in the midst of sovereign risks, as all eyes are on interim dividends.”
Last Week’s Trading Activities
Performance of the equities market last week was upbeat for the second consecutive week of sustained and strong buying interests in some of the fundamentally sound tickers.
Thus, the All-Share Index rose week-on-week (W-o-W) by 0.73 per cent to close at 50,045.83 points. Similarly, market capitalisation gained N197 billion W-o-W to N26.994 trillion. The positive outing was underpinned by investors’ interest in Guinness Nigeria, Stanbic IBTC Holdings, Access Holdings, Lafarge Africa, BUA Foods and BUA Cement Plc.
Sectoral performance was largely bullish as the Consumer Goods index rose by 2.01 per cent W-o-W. Industrial Goods index recorded a weekly gain of 1.36 per cent, while Banking and Oil & Gas indices up by 1.21 per cent and 0.65 per cent respectively, W-o-W. On the other hand, Insurance index declined 0.05 per cent W-o-W.
The market breadth for the week was positive as 43 equities appreciated in price, 21 equities depreciated in price, while 92 equities remained unchanged. Vitafoam Nigeria led the gainers table by 16.26 per cent to close at N23.60, per share. e-Tranzact International followed with a gain of 16.23 per cent to close at N2.65, while Fidelity Bank went up by 11.11 per cent to close to N3.40, per share.
On the other side, Unilever Nigeria led the decliners table by 9.63 per cent to close at N12.20, per share. McNichols followed with a loss of 9.63 per cent to close at 67 kobo, while CWG declined by 9.09 per cent to close at 90 kobo, per share.
Overall, a total turnover of 1.195 billion shares worth N12.924 billion in 19,305 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 914.443 million shares valued at N15.263 billion that exchanged hands last week in 18,021 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.017 billion shares valued at N5.685 billion traded in 10,107 deals; contributing 85.09 per cent and 43.99 per cent to the total equity turnover volume and value respectively. The ICT Industry followed with 37.063 million shares worth N4.575 billion in 1,996 deals, while the Consumer Goods Industry traded a turnover of 35.184 million shares worth N1.209 billion in 2,471 deals.
Trading in the top three equities; Sterling Bank, Fidelity Bank and Access Holdings (measured by volume) accounted for 540.056 million shares worth N1.499 billion in 2,179 deals, contributing 45.18 per cent and 11.60 per cent to the total equity turnover volume and value respectively.
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