Positive sentiment and portfolio reshuffling pervaded the Nigerian stock market last week fueled by recent developments in the foreign exchange, FX, landscape amidst higher treasury bills yield as investors increased buying interests in stocks apparently to hedge against inflation.
Consequently, investors gained over N369 billion as the Nigeria Exchange Limited, NGX, market capitalisation closed higher at N38.925 trillion from N38.556 trillion the previous week.
In the same manner, another stock market performance indicator, the NGX All Share Index, ASI, inched higher by 0.9% to close at 70,849.38 points on Friday up from 70,196.93 points the previous weekend.
The stock market recorded gains on all trading sessions, driven by increased demand for BUA Cement which went up by 6.5% followed by First Bank Nigeria Holding rising by , 12.4% and SEPLAT 3.9%.
Accordingly, the Month-to-Date,MtD and Year-to-Date, YtD returns stood at 2.3% and 38.2% respectively. Trading activity levels reflected market optimism, as total traded volume and value increased by 3.3% and 12.3% Week on Week. W/W, respectively. Meanwhile, sectoral performance was mixed as the Oil and Gas Index gained 2.9%, Industrial Goods Index 2.7% and Banking Index 1.2%, while the Consumer Goods Index closed flat. The Insurance index was the sole loser for the week under review as it declined by 0.5%.
Reacting to market development, analysts at Cordros Research said: “
This week, we expect the bears to book profit across most counters following the recent market rally.
Consequently, we expect a “choppy theme” even as institutional investors search for clues on the direction of yields in the Fixed Income, FI market. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.”
In their own comment on market outlook, analysts at Investdata Consulting Limited, said : “ We expect profit taking and mixed sentiments on portfolio rebalancing on the strength of the better-than-expected corporate numbers released and expected inflation reports in the face of sector rotation.
This mixed bag of rising fixed income market yields will continue to influence portfolio management, rebalancing and readjustment ahead of macroeconomic reports, like the October consumer price index, Q3 Gross Domestic Product, GDP, the Monetary Policy Committee meeting, and year end seasonality.”