Capital market analysts have predicted mixed performance for equities this week, amid the continued portfolio repositioning ahead of interim dividend season, while audited accounts of March year-end companies begin to hit the market.
The chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion said: “we expect a mixed trend this week. We note also the flow of funds into the fixed income segment on the rate hike by the CBN, as sector rotation persists and players digest the macro-economic data and Q1 corporate earnings release.
“Analysts are also on the lookout for the May consumer price index to support recovery in the new month amid oil prices oscillation. Also, the market continues to interpret the rising inflation in relation to the crude oil price and other factors, in the midst of profit-taking and portfolio rebalancing. This will result in market players targeting fundamentally sound and dividend-paying stocks in the hope of dividend announcements.”
Analysts at Cowry Assets Management Limited said: “in the new week, we expect to see mixed reactions to the daily change of the local bourse. Meanwhile, with the expectations of Q2 numbers coming in over the next few weeks we continue to maintain positive sentiments in the market although profit-taking will likely set in as prices rise. Investors are advised to trade on companies’ stocks with good fundamentals and a positive outlook so as to avoid falling into the bear trap.”
Cordros Securities Limited added that, “we expect alpha-seeking investors to continue to seek trading opportunities in companies that delivered impressive earnings during the Q1, 2022 earnings season despite the expectation of an uptick in yields in the FI market.
“However, we think the absence of a near-term catalyst will likely skew overall market sentiments to the negative side, particularly as the political space gets heated up. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.”
Analysts at Afrinvest Limited believe the market would rebound and close the week positively as investors position for interim dividend.
Last Week’s Trading Activities
Positive sentiments returned to the domestic bourse last week as investors took advantage of the moderation in share prices last week to make re-entry into sound companies with attractive dividend yields.
Thus, the All-Share Index inched higher by 0.55 per cent week-on-week (W-o-W) to close at 53,201.38 points. Similarly, market capitalisation gained N158 billion W-o-W to close at N28.681 trillion. Precisely, bargain hunting in MTN Nigeria Communications (MTNN), Union Bank of Nigeria (UBN), Lafarge Africa and Presco drove the weekly gain.
Performance across sectors was mixed albeit with a bearish tilt. Notably, the NGX Consumer Goods Index, NGX Banking Index and NGX Consumer Index decreased by 0.10 per cent, 2.12 per cent, and 1.61 per cent respectively to close at 640.90 points, 415.33 points, and 178.85 points respectively. On the other hand, the Oil and Gas index gained 0.7 per cent to close at 552.73 points, while Industrial Goods index rose by 0.3 per cent to close at 2,199.13 points.
The market breadth for the week was negative as 29 equities appreciated in price, 36 equities depreciated in price, while 91 equities remained unchanged. Global Spectrum Energy Services led the gainers table by 10.00 per cent to close at N2.75, per share. Conoil followed with a gain of 9.97 per cent to close at N32.00, while Fidson Healthcare went up by 9.59 per cent to close to N12.00, per share.
On the other side, Industrial & Medical Gases Nigeria led the decliners table by 16.82 per cent to close at N9.15, per share.
Transnational Incorporated followed with a loss of 11.20 per cent to close at N12.50, while MRS Oil Nigeria declined by 9.76 per cent to close at N14.80, per share.
Overall, a total turnover of 1.831 billion shares worth N19.494 billion in 21,723 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 28.736 billion shares valued at N209.060 billion that exchanged hands previous week in 23,688 deals.