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Pending FY, Q1 results will provide support for equities market

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… As market falls 0.12% today
By Nkiruka Nnorom

As equities market continues to swing up and downward, capital market operators have said that pending full year as well as quarter one (Q1) financial results that just started trickling in, will set the tone for the equities market this week.

NSE moves 403.14m shares worth N9.14bn

They also indicated that the low yield in fixed income instruments would likely provide additional support to the market.

This comes as the market opened the week today on a negative note following sell-offs in industrial goods stocks, particularly Dangote Cement Plc and Lafarge Africa Plc.

Speaking on the outlook for the week, Mr. Ezekiel Oluyole, Managing Director/CEO, Investment One Securities, the market has relatively been stable and the stability is expected to continue baring any negative news.

He said: “The market has been relatively stable for the past two to three weeks and I think we will still see that stability next week (this week). But as the Q1 results are released, (some of the Tier 1 banks have released their results and they are largely in line with management guidance) we will continue to see the stability.

“Also, the rate at the money market has been trending down these days and so that should provide a support for equities market and as dividend are paid, we may also see that some investors are likely to reinvest their dividend and that will also pave way for the market.”

Analysts at Cowry Assets Management, said: “This week, we expect the local bourse to close in the green territory as investors mop up stocks with impressive first quarter earnings.”

Analysts at Cordros Capital also expects that declining fixed income yields, relatively lower prices of value stocks and expected positive corporate releases will all combine to drive the market.

In his own view, Mr. David Adonri, Managing Director/CEO, Highcap Securities, said that the market would react based on the disclosures that would be made this week. “If the results are impressive, of course, the market will react and go up, but if the results are not impressive, because there is nothing out there to drive the market now rather than corporate disclosures, the market will also react accordingly.”

Meanwhile analysis to today’s transaction showed that the local bourse opened the week on a negative note, with the All Share Index, ASI, dropping by 0.12 percent to 40,763.93 points, thereby moderating the Month-to-Date, MtD, and Year-to-Date, YtD, returns moderated to -1.78 percent and 6.59 percent respectively.

Similarly, the equities capitalisation also fell by N18 billion or 0.12 percent to N14.723 trillion from N14.725 trillion.

24 losers emerged during the day versus 19 gainers. Continental Reinsurance led the losers, dropping by 5.14 percent to close at N1.66. Unity Bank Plc followed by 4.72 percent decline to close at N1.21; Flourmills of Nigeria Plc placed third, declining by 4.69 percent to close at N33.55; Jaiz Bank Plc was the next with 4.65 percent decrease to close at N0.82, while African Insurance Company Plc closed the list of top five losers, depreciating by 4.35 percent to close at N0.22 from N0.23 per share.

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