Analysts are anticipating that the Nigerian equities market sentiment will remain mixed due to ongoing portfolio realignments by investors and fund managers seeking alpha in the market as well as the expectations from the fixed income market.
In the just concluded week, the level of investor sentiment was shaky as market players digested the latest inflation figures which came at 29.90 per cent in January coupled with the expectation for a continued increase in money market rates at the primary auctions which will render the equity markets as an unattractive investment option for investors.
Analysts Optimism
In the new week, Cowry Assets Management Limited anticipate a mixed trend of market activities as the recently published inflation data permeates the market with portfolio rebalancing by investors and fund managers seeking alpha in the market as well as the expectations from the fixed income market.
“However, a pullback at this juncture is expected to strengthen upside potential. Amidst all these, we continue to advise investors to take position in stocks with consistent track records of dividend payments and strong fundamentals and growth prospect to support earnings growth,” Cowry stated.
Also, Afrinvest Limited said, ‘in the new week, we expect the market to record mild gain supported by improved sentiment and corporate earnings releases.’
Last Week’s Trading Activities
The benchmark index last week reversed it loss from prior week as it rebounded on mixed sentiment and low trade volumes despite positioning in the bellwether stocks which drove activity.
Thus, the All-Share index closed last week 3.79 per cent higher to close at 105,722.78 points. Similarly, the total market capitalization of listed equities rose by N2.1 trillion to close the week at N57.850 trillion.
Sectoral performance for the week exhibited a mixed trend. The NGX Insurance, NGX Oil & Gas, and NGX Consumer Goods indices, recorded gains of 2.66 per cent, 10.96 per cent, and 5.25 per cent week-on-week. On the contrary, the NGX Banking and NGX Industrial indices bled with losses, declining by 1.34 per cent and 1.83 per cent, respectively.
However, market breadth for the week was negative as 35 equities appreciated in price, 51 equities depreciated in price, while 68 equities remained unchanged. Juli led the gainers table by 45.54 per cent to close at N1.47, per share. Geregu Power followed with a gain of 33.30 per cent to close at N901.00, while BUA Foods went up by 20.82 per cent to close to N357.50, per share.
On the other side, Meyer led the decliners table by 18.96 per cent to close at N5.60, per share. Morison Industries followed with a loss of 18.69 per cent to close at N2.48, while DEAP Capital Management & Trust declined by 14.29 per cent to close at 60 kobo, per share.
Overall, a total turnover of 1.559 billion shares worth N36.497 billion in 42,546 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 2.478 billion shares valued at N47.856 billion that exchanged hands prior week in 54,982 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.127 billion shares valued at N18.908 billion traded in 19,424 deals; contributing 72.27 per cent and 51.81 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 117.400 million shares worth N1.508 billion in 2,775 deals, while the Consumer Goods traded a turnover of 98.422 million shares worth N4.008 billion in 6,322 deals.
Trading in the top equities; United Bank for Africa (UBA), FBN Holdings (FBNH) and Guaranty Trust Holding Company (GTCO) accounted for 389.286 million shares worth N11.757 billion in 5,372 deals, contributing 24.96 per cent and 32.21 per cent to the total equity turnover volume and value respectively.
