The bearish mood at the Nigerian stock market in the first week of May was a
reflection of poor and weak first quarter earnings released which triggered sell
pressure leading to market correction.
The negative sentiment affected the composite index NSEASI having lost 319.99 basis
points to close at 34,388.12 from the opening figure of 34,708.11, representing 0.92
percent decline.
The Index rejected further northward movement to close in red for five consecutive
trading sessions of the week.
Consequently, the bearish mood of the market affected the year - to - date
performance as it dipped by 0.78 percent.
The bears maintained market dominance throughout last week.
More equities recorded red points in the week under review except for the fourth
trading day that the breadth recorded more advancers with less decliners.
In the same negative trend, the Market capitalisation lost about N108 billion to
close at N11.61 trillion.
Equally, sectoral indices yielded to downward pressure; except for NSEBNK, NSEINS
and NSEIND (with weekly gains of 2.02 per cent, 1.42 per cent and 0.57 per cent
respectively) while NSECNSMRGDS led the sectoral decliners with -2.52 per cent
weekly returns.
On the other hand, the market recorded improved level of transaction last week as
volume and value of traded closed north by 36 per cent and 68 per cent respectively
relative to the previous week's level.
At the close of trading activities, 1.58 billion shares valued N20.15 billion were
exchanged in 22,791 deals compared with 1.17billion shares worth N11.96 billion
exchanged in 17,419 deals in the previous trading week.
The Financial Services sector maintained the lead by volume terms, dominating trades
in excess of 70 per cent of total volume of trades last week courtesy of banking
stocks.
The sector rally was largely driven by the investors taking advantage low price and
current attractive valuations to position ahead of May 29 and the rest of the year.
Market Outlook
The market defiled our expectation of recovering market last week.
We expect moderate gain as accumulations by smart investors continue this week at
the current price as many good companies are selling at a discount given strong
upside potential when the market bounced back with in flow of funds to boost market
fundamental.
The lesser pressure on the Naira reduced in recent times due to improved oil prices
and economic reforms of the incoming government is expected to impact on the market.
Also, CBN is expected to focus more on monetary policies that will drive the economy
and check mate the rising inflation figures.
STOCKS TO WATCH
Africa Prudential, Nacho, Zenith Bank, Access Bank, UBACapital, Flourmill,
and Dangote Cement.
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