Performance of the Nigerian equities stayed bearish as investors snubbed equities on weaker earnings expectation. In summary, the NSE-ASI shed 462.52 absolute points or 1.79 per cent to close at 25,340.02 points, last week. Similarly, the market capitalization depreciated by N122 billion to close at N8.770 trillion.

According to analysts at Cordros Capital, following the previous and last week’s underperformance, the index has now declined for two weeks in a row, the first this year.

They said, “Sentiment is expectedly low, as investors continue to play safe in risk free assets. Although there have been snippets of activities in selected sectors such as banking, consumer goods and cement, the impact is less visible on the overall market given investor preference for only a few companies within the aforementioned sectors.”

For the week, the majority of the indices declined, with the Consumer Goods index posting the largest loss of 5.72 per cent, owing to selloffs in Nestle, Guinness and Nigerian Breweries. The Industrial Goods and Oil and Gas indices also came under pressure with a decline of 2.58 per cent and 0.91 per cent, following respective declines in Dangote Cement and Forte Oil.

Conversely, the Banking (+0.44% w/w) and Insurance (+0.90% w/w) indices appreciated by 0.44 per cent and 0.90 per cent, boosted by demand for Guaranty Trust Bank, Access Bank, Aiico Insurance and Mansard Insurance respectively.

Stocks activities movement for the week

Trading performance for the week was low, with the All Share Index posting losses in three out of five sessions. The largest loss of the week was recorded in the Monday by 0.83 per cent session, while the gains recorded on Wednesday, 0.05 per cent and Friday, 0.07 per cent were very negligible.

Market breadth was negative, with 19 gainers versus 37 losers. Total volume traded dipped by 8.76 per cent to 1.05 billion shares, with Aiico Insurance, Fidelity Bank and Diamond Bank, accounting for 34.93 per cent of total volume. Total value traded declined by 0.01 per cent to N8.03 billion, with Zenith Bank, Presco and Seplat, accounting for 36.71 per cent of total value.

Outlook for this week

Analysts at Cordros said, “Following back-to-back losses, we expect the index to record a shallow gain this week. In support, the actions of local traders following the FGN’s successful Eurobond issuance could stir a “noisy” rally on the local bourse. That said, visibility on the drivers of fundamental and sustainable recovery remains very low.”

While analysts from Afrinvest stated that, “We expect performance to stay soft as low expectation on corporate earnings continues to dampen sentiment despite attractive market valuation.”


Source : Leadership