Stock Market To Sustain Bearish Sentiment

Analysts on the Nigeria stock market said  mixed sentiments will continue in the market this week, as investors continue to search for value in challenging economic times.

Despite the lingering high interest rates atmosphere, rising inflation and slowing industrial output as a result of policy changes and uncertainty around the globe, there are sectors, industries and individual stocks still seeing positive activities from traders and investors. There are equity that players should pay attention to, as the correction in the Nigerian Exchange (NGX) index action create buying opportunities in some sectors and individual defensive stocks with high dividend high yield and positive earnings growth.

Analysts Optimism

Analysts at Cordros Securities Limited said: “in the week ahead, we believe investors will remain reluctant to leave gains in the market. As such, we expect intermittent profit-taking to persist.

“However, we expect this to be tempered by bargain-hunting activities from early birds ahead of the third quarter (Q3) 2022 earnings season. Notwithstanding, we advise investors to take positions in only fundamentally sound stocks as the fragility of the macro environment remains a significant headwind for corporate earnings.”

Afrinvest Limited said: “we project a muted performance in the local bourse this week barring any positive catalyst.”

Going into the new week, Cowry Assets Management Limited, expected the market to sustain its current trend as investors adopt cautious trading styles at this critical support levels amidst low valuation and liquidity 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 noted.

Last Week’s Trading Activities

Though it was a shortened trading week, it was, however, enough for the local bourse to stage a come-back from its five-week bearish streak.

Accordingly, the All-Share index advanced by 0.46 per cent week-on-week (W-o-W) to close at 47,569.04 points. Similarly, market capitalisation gained N119 billion W-o-W to close at N25.910 trillion.

Analysing by sectors, the Industrial Goods index gains by 3.2 per cent.  Banking index rose by 1.9 per cent and Insurance index appreciated by 1.7 per cent.

On the other side, Oil & Gas index declined by 2.1 per cent, while Consumer Goods index dropped by 0.7 per cent.

The market breadth for the week was slightly positive as 25 equities appreciated in price, 24 equities depreciated in price, while 108 equities remained unchanged. May & Baker Nigeria led the gainers table by 13.82 per cent to close at N4.20, per share. Ikeja Hotel followed with a gain of 9.73 per cent to close at N1.24, while Neimeth International Pharmaceuticals went up by 9.52 per cent to close to N1.38, per share.

On the other side, UAC of Nigeria (UACN) led the decliners table by 12.20 per cent to close at N9.00, per share. FTN Cocoa Processors followed with a loss of 10 per cent to close at 27 kobo, while Global Spectrum Energy Service declined by 9.82 per cent to close at N2.48, per share.

Overall, a total turnover of turnover of 491,815 million shares worth N11.922 billion in 14,350 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 586.939 million shares valued at N8.837 billion that exchanged hands previous week in 17,183 deals.  The Financial Services Industry (measured by volume) led the activity chart with 346.661 million shares valued at N3.757 billion traded in 7,427 deals; contributing 70.49 per cent and 31.51 per cent to the total equity turnover volume and value respectively. The ICT Industry followed with 40.475 million shares worth N3.982 billion in 1,060 deals, while the Conglomerates Industry pulled a turnover of 20.313 million shares worth N28.929 million in 356 deals.

Trading in the top three equities namely Guaranty Trust Holding Company (GTCO), Mutual Benefits Assurance  and FBN Holdings (FBNH) accounted for 211.080 million shares worth N2.478 billion in 2,834 deals, contributing 42.92 per cent and 20.78 per cent to the total equity turnover volume and value respectively