Stock market analysts predicted mixed sentiment on equities trading as players digest CBN rate hike.
This prediction is amidst bargain hunting, repositioning of portfolios and election uncertainty, as investors are taking advantage of the low prices ahead of year end seasonality.
Also, investors will continue to reposition their portfolios on the strength of the recent corporate earnings. Investors are viewing all of these against the backdrop of the rampaging inflation as they hedge against the rising inflation in some stocks with high dividend yields and strong earnings to support higher payout as financial year end of many companies draw closer.
Analysts Optimism
Going into the new week, Cowry Assets Management Limited expected the market to trade with mixed sentiments as the digestion of the current MPC rate hike and weak economic growth data put investors in a reactive position on the next move in the market.
“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.
Cordros Securities Limited said: “in the week ahead, we do not think the bulls will repeat the flawless victory that ensued this week as the bears are likely to book profit across most counters.
“Consequently, we see more of a ‘choppy theme’ even as institutional investors continue to search for clues on the direction of yields in the FI market. However, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.”
According to Afrinvest Limited, “this week, we anticipate the bullish streak would continue following renewed interest in the market. However, this sentiment might be short-lived as economic catalysts remain absent.”
Last Week’s Trading Activities
The dominance of the bulls ensured the local bourse closed last week on a strong footing, as the benchmark index recorded gains in all trading sessions following demand for bellwether stocks.
Accordingly, the All-Share Index advanced by 6.88 per cent week-on-week (W-o-W) to close at 47,554.34 points. Similarly, market capitalisation increased by N1.67 trillion to close the week at N25.902 trillion.
Notably, foreign investors’ interest in Airtel Africa and bargain hunting in Dangote Cement, MTN Nigeria Communication (MTNN), BUA Cement, BUA Foods and Nigeria Breweries spurred the positive outturn.
Sectoral performance was largely bullish following gains in the NGX Industrial Goods index by 9.4 per cent. NGX Insurance index recorded weekly gain of 5.1 per cent, while NGX Banking and NGX Consumer Goods Index rose by 3.1 per cent and 0.1 per cent respectively, W-o-W.
On the flip side, the NGX Oil and Gas index declined by 1.3 per cent for the week.
Market breadth for the week was positive as 40 equities appreciated in price, 19 equities depreciated in price, while 89 equities remained unchanged. Nigerian Breweries led the gainers table by 18.67 per cent to close at N48.95, per share. Sovereign Trust Insurance followed with a gain of 16.67 per cent to close at 28 kobo, while Prestige Assurance went up by 16.22 per cent to close to 43 kobo, per share.
On the other side, Nestle Nigeria led the decliners table by 20.67 per cent to close at N963.90, per share. Capital Hotel followed with a loss of 10.00 per cent to close at N3.06, while SCOA Nigeria declined by 9.30 per cent to close at N1.17, per share.
Overall, a total turnover 711.618 million shares worth N15.338 billion in 16,662 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 694.376 million shares valued at N8.667 billion that exchanged hands previous week in 15,418 deals.
The Financial Services Industry (measured by volume) led the activity chart with 461.230 million shares valued at N3.697 billion traded in 7,653 deals; contributing 64.81 per cent and 24.10 per cent to the total equity turnover volume and value respectively.
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