The Nigerian stock market this week looks set to end the reign of bears as evidenced in an impressive start this week. Before now, the stock market was a reflection of investors’ weak sentiment as they feared uncertainties trailing the economy and financial markets.
The rob-off effect of bear reign last week reflected on N15billion loss, but analysts see resumption in bargain hunting reversing this trend with associated liquidity flows.
Amid this, recent optimism around improved stocks buying follows sell pressure which pushed most value stocks to attractive entry prices for bargain hunters.
“We expect to see resumed bargain hunting activities,” said investment analysts at Lagos-based Cowry Asset Management Limited.
Already, the stock market opened this week with an impressive gain of N32billion at the close of deals last Monday; an indication that investors with medium to long term investment horizon may have started taking advantage of current cheap valuations of growth stocks.
“We look to see feelers of policy direction in the week ahead as the new government is expected to send in ministerial list to the Senate. This should moderate the uncertainties trailing the financial market,” said research analysts at United Capital plc.
According to the analysts, “Bearish sentiments should wane this week though markets may still remain relatively calm. We therefore see a sideways trading in the week, tilted towards the negative.”
The Nigerian Stock Exchange (NSE) performance indicator –the NSE All Share Index (ASI) lost 43.16points or 0.13% to close at 33,621.75 points from 33,664.91 points recorded at the beginning of deals last week. Also, week-on-week (WoW), the value of listed equities (market capitalisation) depreciated from N11.491trillion to N11.476trillion.
Last week, only twenty-four (24) equities appreciated in price, lower than twenty-seven (27) equities in the preceding trading week. Forty-two (42) equities depreciated in price, lower than forty-seven (47) equities in the preceding week, while one hundred and twenty-seven (127) equities remained unchanged, higher than one hundred and nineteen (119) equities recorded in the preceding week.
Year-to-date (Ytd) performance of the equities market moderated to -2.99% last week. So far, banking stocks are the top performance while consumer goods stocks are the most laggard.
Taking further looks at Nigerian equities performance this week, analysts at Lagos-based investment house, Meristem said they anticipate a reversal in market mood this week, “as the new government settles into office and unveils its blueprints for economic growth and stability.” Though, the analysts linked the previous lull in market activity to “the dearth of market moving information in the nation’s economic, political and financial space.
Iheanyi Nwachukwu
