Mixed trading, sentiment may linger in stock market this week

TThe recent swings in the Nigerian stock market, as evidenced by the rising and falling trends in sentiment, may continue in the market this week.

Analysts noted that the continued mixed feelings are due to sell-offs, pullbacks and bargain hunters taking advantage of the prevailing relatively low prices of stocks and blue-chip companies relative to value. This is especially true for companies that suffered losses amid the strong numbers of these companies, revealing their undervalued condition, as evidenced by high dividend yields pointing to the possibility of a higher payout as a hedge against rising inflation.

Analysts Optimism

InvestData Consulting Limited’s chief operating officer, Mr Ambrose Omordion, said: “We expect the mixed trends and sentiments to continue on the bargain-hunting market as players react to the impressive half-year results in anticipation of more corporate scorecards, especially from the first-tier market. banks amid sovereign risks, as all eyes are on interim dividends.

“We are also noticing the flow of money into the fixed income segment during the CBN rate hike as sector rotation continues. Analysts are also focused on looking at Q2 GDP and cash flow amid oil price swings.”

He added that “the market also continues to interpret rising inflation in relation to the price of crude oil and other factors, amid profit-taking and portfolio rebalancing. This will lead market players to target fundamentally sound and dividend-paying stocks in the hope of dividend announcements.”

Going into the new week, analysts at Cowry Assets Management Limited expected the market to trade with mixed sentiment as investors position themselves to rebalance their portfolios while continuing to show minimal apathy towards risky assets such as stocks . on stocks of companies with sound fundamentals and positive prospects.”

Cordros Securities Limited said: “Over the next week, we believe investors will focus on the outcome of the bond auction scheduled for Monday (August 15, 2022) to gain more clarity on the movement in fixed income (FI) interest rates). market.

“As a result, we expect cautious buying from dividend-seeking investors amid intermittent profit-taking. Nevertheless, we reiterate the need to position only in fundamentally healthy stocks as the unimpressive macro environment continues to be a significant headwind for corporate earnings.”

Trading activity from last week

The bears dictated the course of events in the domestic exchange as profit-taking activity dominated market performance, with the benchmark index register falling during four of last week’s five trading sessions.

Exactly, the All-Share Index fell 2.09 percent week-over-week (WoW) and closed at 49,664.07 points. Similarly, the market cap fell N571 billion to close at N26,787 trillion.

In particular, the sale of shares of MTN Nigeria Communications (MTNN), BUA Cement, Dangote Cement and Stanbic IBTC Holdings led to the weekly loss.

By sector, the Industrial Goods Index fell 5.2 percent WoW. The banking index recorded a weekly loss of 0.9 percent, while the oil and gas index lost 0.4 percent WoW. On the other hand, insurance posted a weekly gain of 6.0 percent and the consumer goods index rose 3.0 percent WoW.

Market breadth for the week was positive: 33 stocks rose in price, 26 stocks fell, while 97 stocks remained unchanged. Ikeja Hotel led the winners table by 30.93 percent to close at N1.27 per share. Multiverse Mining and Exploration followed with a gain of 29.79 percent to close at N2.44, while NEM Insurance rose 29.71 percent to nearly N4.41 per share.

On the other hand, Cutix led the table of the decliners by 14.58 percent to close at N2.05 per share. Caverton Offshore Support Group followed with a loss of 10.26 percent to close at N1.05, while BUA Cement fell 9.95 percent to close at N52.95, per share.

In total, total sales of 1,511 billion shares worth N13,547 billion in 20,074 deals were traded by investors on the trading floor last week, as opposed to a total of 705,636 million shares worth N12,850 billion that were traded last week from hand exchanged in 22,124 offers.

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