The Nigerian stock market sentiment is anticipated to remain a mix of caution and optimism, driven by investors’ anticipation of corporate earnings reports and economic indicators this week.
The Nigerian Exchange last week continued its upward trajectory, extending its weekly winning streak. This positive momentum comes as investors usher in the third quarter of the year with renewed optimism, positioning themselves strategically ahead of the anticipated release of second quarter and half-year corporate earnings.
A wave of portfolio rebalancing activities and calculated position-taking dominated market sentiment, fueled by expectations of resilient financial performance from listed companies.
Several corporates have already begun declaring closed periods for second quarter (Q2) disclosures, with forward-looking earnings forecasts for the second half of 2025 providing a tailwind for market confidence.
These updates, coupled with early signs of improved profitability from select firms, served to galvanize investor interest throughout the week.
Against this backdrop, the NGX All-Share Index last week climbed to 120,989.66 points, reflecting the 0.83 per cent week-on-week gain, as bargain hunters took advantage of perceived undervaluations. Also, the overall market capitalisation gained N377 billion or 0.50 per cent to close the week at N 76.339 trillion.
Looking ahead, analysts at Cowry Asset Management Limited said, “market sentiment in the coming week is expected to remain a mix of caution and optimism. Investors will likely focus on macroeconomic cues, particularly the Q1 2025 economic performance report, alongside the flurry of Q2 and H1 financial results from listed firms.
“While market volatility may persist amid this flurry of activity, the broader outlook remains positive for fundamentally sound stocks with strong earnings prospects. As always, we continue to advise discerning investors to maintain a long-term view, prioritising companies with resilient balance sheets, consistent dividends, and solid growth narratives.”
United Capital Plc explained that “looking forward, the equities market might continue in its upward trend leading to a slight gain in the ASI. This is hinged on the market benefiting from the excess liquidity in the financial system. Similarly, investors might start positioning for Q2-earning season, favoring corporates with FX gains, cost control, clear growth trajectory, and those with potential for quality interim dividend payment.”
The Research Firm noted that “on the flip side, a potential OMO auction might reduce the inflow of funds into the equities market as elevated yields keep investors anchored to the fixed income market instruments. Similarly, positive sentiments will be moderated by elevated inflation, heightened interest rate, weak naira and general uncertainty in the global and domestic macroeconomic space.
“We expect retail investors to continue to take profit from the previous week’s gains, tactically slowing the upward movement of the equities market. We advise investors to cherry pick fundamentally sound stocks with potential for interim dividend payment.”
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