As the Nigerian stock market opens trading activities for October, analysts expect the market to sustained the previous week’s uptrend.
In its weekly review, Cowry Asset Management Limited stated that, ‘in the new week, we expect the equities market index to close in positive territory as investors take position ahead of companies’ nine months financial results releases.’
Analysts at Afrinvest Limited also said that ‘in the coming week, we expect the positive momentum to gain further traction on improved investor sentiment.’
On market outlook, the chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion said: “we expect a continuation of trend after index action had formed a strong bullish engulfing on quarter-end window dressing, oil price trading above $75, and Q3 earnings expectation, just as investors and traders take advantage of pullback to position ahead of the earnings reporting season.
“Also noteworthy is the fact that many stocks are trading within their buy ranges, a situation expected to attract funds into the equity space, given the dividend yield capable of serving as a hedge against inflation.”
Omordion added that, “also, institutional investors and others continue to digest recently release economic data ahead of the month and quarter-end, as well as the continued repositioning of portfolios for the year’s last quarter. Also, investors are still observing the interplay of forces in the FX market as the CBN gives a guideline for the new digital currency platform.
“The low volume suggests that institutional investors and others are still cautiously looking at the economic data and policy direction of the economic managers. It is noteworthy that oil price pullback in the international market; corporate actions, as well as the interim dividend possibilities, are around the corner.
“We expect the bears to dominate market performance in the coming week, as investors cash out on the gains across bellwether stocks this week. However, we expect this to be tempered by bargain hunting activities from early birds ahead of the third quarter (Q3), 2021 earnings season. However, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.”
However, analysts at Cordros Securities Limited expected the bears to dominate market performance in the coming week, as investors cash out on the gains across bellwether stocks this week.
“However, we expect this to be tempered by bargain hunting activities from early birds ahead of the Q3, 2021 earnings season. However, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings,” they said.
Last week, the domestic equities market index sustained its bullish sentiment as investors went home with over N656 billion in just one week. Specifically, investors in University Press, Dangote Cement, Presco and Courteville Business Solutions shares went home smiling at the end of the week given the appreciable increases in their respective share prices.
Hence, given the bullish sentiment in the equities space, the All-Share Index (ASI) rose week-on-week (W-o-W) by 1,258.89 points or 3.23 per cent to close at 40,221.17 points. Similarly, market capitalisation rose N656 billion W-o-W to N20.956 trillion.
Sectoral performance was also positive, the NSE Banking, NSE Consumer Goods, NSE Oil & Gas and the NSE Industrial indexes rose by 0.60 per cent, 3.35 per cent, 0.92 per cent and 6.65 per cent respectively to close at 370.85 points, 567.17 points, 367.27 points and 2,089.38 points respectively. On the flip side, the NSE Insurance index fell by 7.58 per cent to 173.04 points.
The market breadth for the week was positive as 33 equities appreciated in price, 22 equities depreciated in price, while 100 equities remained unchanged. University Press led the gainers table by 20.59 per cent to close at N1.23, per share. Dangote Cement followed with a gain of 14.29 per cent to close at N280.00, while Presco Plc went up by 9.93 per cent to close to N80.25, per share.
On the other side, AXA Mansard Insurance led the decliners table by 29.82 per cent to close at N2.33, per share. Julius Berger Nigeria followed with a loss of 10.00 per cent to close at N24.30 and Greif Nigeria declined by 9.92 per cent to close at N5.45, per share.
The market last week opened for four trading days as the federal government declared Friday October 1, 2021 a Public Holiday to mark the Nations 61st Independence Anniversary. Overall, a total turnover of 2.187 billion shares worth N16.183 billion in 14,377 deals were traded during the week by investors on the floor of the Exchange, in contrast to a total of 1.290 billion shares valued at N13.921 billion that exchanged hands previous week in 16,745 deals.
The Financial Services Industry (measured by volume) led the activity chart with 778.434 million shares valued at N5.591 billion traded in 7,183 deals; contributing 35.60 per cent and 34.55 per cent to the total equity turnover volume and value respectively. The Services Industry followed with 775.712 million shares worth N2.909 billion in 416 deals, while Consumer Goods Industry traded a turnover of 448.662 million shares worth N3.999 billion in 2,257 deals.
Trading in the top three equities; Transcorp Hotels, Honeywell Flour Mill and FBN Holdings (FBNH), measured by volume accounted for 1.494 billion shares worth N6.944 billion in 1,017 deals, contributing 68.33 per cent and 42.91 per cent to the total equity turnover volume and value respectively.
On Exchange Traded Products (ETPs) platform, a total of 160,433 units valued at 52.347 million were traded last week in 23 deals compared with a total of 9,728 units valued at N437,821.70 transacted last week in 18 deals, while on the Bond market, a total of 41,267 units valued at N42.568 million were traded last week in 17 deals compared with a total of 60,929 units valued at N62.810 million transacted prior week in 27 deals.