Despite a record bargain hunting in the early part of this week, bullish bets at the Nigerian equities market could be discontinued as investors move to take profits on stocks that recorded impressive gains in recent past.
Recently, the stock market witnessed sustained bargain hunting on speculative investors expectation of likely corporate actions from some blue chip companies.
The Nigerian bourse rallied last week after investors raised equities bets following the release of Dangote Cement full year 2015 results which offered an N8 per share dividend.
The Nigerian Stock Exchange (NSE) All-Share Index (ASI) and Market Capitalisation appreciated by 6.57percent and 6.55percent to close last week at 25,820.10 points and N8.882 trillion respectively.
Similarly, all other Indices finished higher last week, with the exception of the NSE-Main Board Index, NSE Consumer Goods Index and NSE Oil/Gas Index that depreciated by 0.54percent, 1.36percent and 6.10percent respectively while the NSE ASeM Index closed flat.
Market analysts see a mix of bargain hunting and profit-taking activities at the stock market despite that more listed companies full year 2015 results are expected this week at the Nigerian Stock Exchange.
“We expect the equity market to take up slightly more bullish bets as earnings season gets into gear albeit with stints of profit taking following the past week’s rally”, said market analysts at Vetiva Capital Management Limited.
“We believe attractive dividend play by investors has triggered momentum in equities, a theme we think will continue in the coming week as investors continue to speculative.
“It is on this basis that we expect equities will close higher this week although gains will likely be tempered by profit booking on prior positions as investors remain cautious”, said research analysts at Lagos-based United Capital plc.
Market sentiments has remained largely positive as investors seek to further take advantage of low equity prices. For the most part of last week, the rally that defined market activities was largely tied to expected dividend yields, according to research analysts at another Lagos-based investment house, Dunn Loren Merrifield.
“In anticipation of an influx of earnings releases and dividend declarations in the coming week, we anticipate a soar in investor’s appetite. While we expect the market to sustain the current trend, we opine that plausible profit taking on counters that gained in the week could stem positivity”, said analysts at Meristem Securities Limited.
Iheanyi Nwachukwu
