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Divergent outlook for stock market as investors lose N542bn

Stories by Peter Egwuatu

ANALYSTS have expressed divergent views on the likely outcome of the market for this week following the sale pressure that led to the loss of N542 billion.

The Nigerian stock market recorded loss in every session of last week, with the All Share Index shedding 3.39% Week on Week, W/W to 43,127.92 points, as investors took profit across major sectors.

Nigerian Stock Exchange

As a result, Month-to-Date and Year-to-Date, YtD returns dropped to -2.74% and 12.77% respectively. All sector indices closed in the red, with the Industrial Goods (-3.52%) index recording the largest loss, and the Banking (-3.41%), Consumer Goods (-2.60%), Oil & Gas (-1.27%), and Insurance (-0.73%) indices following suit.

Top traded stocks

The top traded stocks by volume were Sterling Bank (N1.8billion), Skye Bank (N282.million) and  Lasaco (N266.9million), while  Sterling Bank (N3.9billion), Zenith Bank (N2.2billion) and  Guaranty Trust Bank (N1.7billion) were the top traded stocks by value.

In their review, analysts at Lagos based investment firm, Vetiva Capital Management, said”With sell pressure persisting at session close, we expect that the negative sentiment will filter into week open trading.

Stock Watch: “It was an all red week for Fidelity Bank as investors swooped in to take profit on the stock, pushing it 12 per cent downwards. The stock which trades at N3.26, above consensus target price of N2.52 has returned 33 per cent YtD”

Analysts at Cowry Asset Management Limited said: “This week, we anticipate increase  in NSE All Share Index WoW   as investors reposition in the market for anticipated corporate results.”

In their projection for the year, analysts at Lagos based investment firm, Afrinvest Research, said: “We expect to see a rebound as a result of bargain hunting by investors.We expect a strong rally in the equity market in the first half of the year 2018.   We see investment opportunities in the Banking, Building Materials and Consumer Goods sectors of the market.”

Aslo, analysts at FSDH said: We expect a strong rally in the equity market in the first half of the year 2018.   We see investment opportunities in the Banking, Building Materials and Consumer Goods sectors of the market.

Global Markets

Global market rout persisted last week, sparked by sharp losses in the US, with most stock indices plunging further to record low levels and wiping out the year’s gain. The rout was largely catalyzed by volatility shocks, inflation concerns, economic data, monetary policy decision, increasing oil production and rising bond yields. Specifically, Asian stocks (CSI 300: -10.08%, Nikkei 225: -8.13%) posted the largest loss, followed by the US equities (DJIA: -6.51%, S&P 500: -6.56%), and European shares (FTSE 100: -4.35%; Euro Stoxx 50: -5.46 %). The MSCI EM index (-5.50%) closed lower, as selloffs persisted in China and Brazil (-3.0%). Similarly, the MSCI FM index (-2.98%) sustained bearish trend, as pressures in Nigeria (-3.39%) and Kenya (-0.7%) offset gains in Ghana (+3.40%).


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.