Against predictions, the Nigerian equities market rose marginally Week-on-Week by 0.06 per cent to settle at 38,943.87 basis points. In the review week, the Central Bank of Nigeria retained the country’s interest rates at 11.5 per cent, even as the National Bureau of Statistics reported decline in inflation at 17.01 per cent.
The slight upward movement at the floor of the Nigerian Exchange Limited saw the local stock market index turn positive, as yields in the fixed income space moderate further.
The bullish momentum resulted in the Year-to-Date loss of the domestic bourse to mellow to 3.29 per cent. Although, sectoral performance failed to mirror the benchmark index, as all the five indices tracked closed in the red.
In the just-concluded week, all the market indices traded in the red. The banking, insurance, consumer goods, industrial and oil and gas indices fell by 0.79 per cent, 0.58 per cent, 0.21 per cent, 3.35 per cent and 0.24 per cent to close at 370.21bps, 184.02bps, 548.99bps, 358.99bps and 1,954.46bps respectively.
While trading activity was weak, investors appeared to have made last-minute moves into the market. Hence the deals, volume and value of stocks traded decreased by 18.91 per cent, 39.95 per cent and 17.76 per cent to 15,663 deals, 0.86 billion units and N10.75bn respectively.
Highlight of market activity showed that investors took profits on Guinness Nigeria, Lafarge Africa and Oando shares to open the week’s trading, as the general market sentiment reflected a bearish momentum, but was chiefly driven by huge transactions of N1.2bn on Nestle Nigeria shares.
Amid renewed bargain hunting, especially on bellwether stocks such as WAPCO, Flour Mills and Zenith Bank, the market recovered at a very marginal gain of 0.01 per cent on the second trading day, but left a mixed market activity, as the value of stocks traded moderated by 25.63 per cent to N1.88bn.
Market activity printed huge transaction value on the third trading day, as investors put more money into MTN Nigeria and Nestle shares. However, renewed profit taking in WAPCO, Eterna, International Breweries and Honeywell Flour Mill shares dragged the index down on Thursday, amid weak market activity that saw investors take the decision to the sidelines.
In the new week, however, analysts at Cowry Asset Management expect the market to close in positive territory.
They said, “We expect the equities market index to close in positive territory, as investors perceive CBN’s preference for growth as a positive for the equities market.”
Also, the Debt Management Office is expected to auction N150bn worth of local bonds of N50bn a piece for the 13.98 per cent FGN FEB 2028, 12.40 per cent FGN MAR 2036 and 12.98 per cent FGN MAR 2050 Re-Openings.
Naira is expected to further depreciate against the United States dollar as CBN’s intention to go against illegal dealers in the foreign exchange market takes time before the desired results begin to manifest.
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