The Nigerian equities market is expected to trade positive as investors continue to position themselves on the released half year (H1) results and other results coming out this week.
Analysts at Cowry Assets Management Limited said: “In the new week, we expect the equities market to trade positive as investors position in stocks of companies that printed positive financial results in H1 2021 as well as those likely to give interim dividends. Also, given the expected moderation in yields, investors may likely move into equities space.”
Analysts at Cordros Securities Limited stressed that, “considering the positive performance in the local bourse this week, we believe earnings from the big banks in the coming week will sustain the positive market sentiments, particularly as the declaration of interim dividends will accompany the results.
“Overall, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.”
The chief operating officer of InvestData Consulting Limited, Ambrose Omordion noted that, “we expect the mixed trend to continue, as portfolio reshuffling and interpretation of the corporate earnings are ongoing ahead of the July inflation data release, as well as the Q2 GDP and results from interim dividend-paying banks.
“Also, investors are still observing the interplay of forces following recent developments in the FX market with the decision to stop the sale of dollar to BDC operators immediately.”
Omordion noted that, some stocks are trading within their buy ranges to become more attractive at this point for income investors and traders, even as the market anticipates positive news, while oil price continues to oscillate above $70 per barrel to support the global economy and stock market recovery across climates.
According to him, we also expect the ongoing COVID-19 vaccination to support a global and domestic economic recovery that will enhance the market and give direction. The banking sector and others remain attractive on the back of the prevailing low prices, despite the mixed half-year earnings.
“Again, the way to go is to target dividend-paying stocks and fundamentally sound companies with growth prospects in 2021, looking the way of mispriced equities ahead of interim dividend announcement. This is especially given that despite the seeming improvements, fixed income yield continues to offer a negative real rate of return due to the galloping inflation.
“However, the strong and faster recovery may continue, depending on market forces, going forward, as propelled by expected Q2 earnings reports,” he pointed out.
Afrinvest Limited stated that, “in the coming week, we expect to see a mixed performance of both profit taking and bargain hunting activities.”
Last week, the market rose four times out of the five trading sessions as sentiment turned positive amid bargain hunting by investors on Oando, Guinness Nigeria and Total Nigeria stocks. Hence, the All-Share Index (ASI) advanced week-on-week (W-o-W) by 263.67 points or 0.68 per cent to close at 38,810.75 points. Similarly, market capitalisation increased by N137 billion to N20.221 trillion as at August 6, 2021.
However, sectorial performance did not reflect the overall positive market performance as most sub-sector indices closed southwards; the NSE Banking, NSE Insurance, NSE Consumer Goods, NSE Oil & Gas and the NSE Industrial indices declined by 0.58 per cent, 1.53 per cent, 0.48 per cent, 0.61 per cent and 0.22 per cent respectively to close at 379.15 points, 194.74 points, 594.79 points, 374.64 points and 1,971.04 points respectively.
Market breadth for the week was negative as 23 equities appreciated in price, 36 equities depreciated in price, while 97 equities remained unchanged. Cutix Plc led the gainers table by 17.95 per cent to close at N5.65, per share. Regency Assurance followed with a gain of 14.29 per cent to close at 48 kobo, while Conoil went up by 10 per cent to close to N20.35, per share.
On the other side, Neimeth International Pharmaceuticals led the decliners table by 14.29 per cent to close at N1.50, per share. AIICO Insurance followed with a loss of 12.04 per cent to close at 95 kobo and Eterna Plc declined by 10.56 per cent to close at N6.35, per share.
Overall, a total turnover of 989.593 million shares worth N8.183 billion in 19,617 deals were traded last week by investors on the floor of the Exchange, in contrast to a total of 1.374 billion shares valued at N11.823 billion that exchanged hands last week in 22,982 deals.
The Financial Services Industry (measured by volume) led the activity chart with 603.656 million shares valued at N3.864 billion traded in 9,337 deals; contributing 61.00 per cent and 47.22 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 102.233 million shares worth N133.987 million in 846 deals, while Consumer Goods Industry traded a turnover of 80.979 million shares worth N1.250 billion in 2,902 deals.
Trading in the top three equities; Transnational Corporation Of Nigeria (Transcorp), Sterling Bank and FBN Holdings (FBNH), measured by volume accounted for 210.187 million shares worth N554.388 million in 1,414 deals, contributing 21.24 per cent and 6.77 per cent to the total equity turnover volume and value respectively.
On Exchange Traded Products (ETPs) platform, a total of 17,550 units valued at N34.012 million were traded last week in 36 deals compared with a total of 12,242 units valued at N911,149.30 transacted previous week in 17 deals, while on the Bonds market, a total of 702,021 units valued at N709.343 million were traded last week in 17 deals compared with a total of 29,324 units valued at N30.799 million transacted prior week in 12 deals.