By Nkiruka Nnorom
INVESTMENT analysts have said that the low equities prices that has resulted from the continuing bearish run in the market has presented an opportunity for bargain hunters, who may re-enter the market this week.
They, however, called for caution and advised investors to concentrate on stocks with sound fundamentals.
But there was no respite for equity investors last week as the All Share Index, ASI, dropped for the fourth consecutive week by a significant 6.38 percent to 36,816.29 points as sentiments remained negative.
Losses were posted in every session of the week, with Friday’s decline, which stood at 3.38 percent, (largely attributable to Dangote Cement’s 7.08 percent loss) being the largest since July 2017 and marking the 11th consecutive session of negative returns.
The year-to-date, Ytd, return turned negative mid-week, currently at -5.4 percent.
Similarly, the market capitalization fell by N908.2 billion to N13.3 trillion at close of transaction on Friday. June 01.
In their reactions, analysts at Cordros Capital, said: “ While acknowledging potential bargain hunting in the short term in what follows relatively lower stock prices, we guide investors to trade cautiously and focus primarily on fundamentally sound stocks.”
Also, analysts at Afrinvest Securities opined that as sentiment on emerging market equities remains weak globally, the Nigerian stock market performance would remain pressured this week.
“On the flip-side, technical analysis shows that the market is ripe for an upturn in performance given the current 14-day Relative Strength Index which is at 10.8 points (oversold region). Furthermore, the successive weeks of losses in the market have created bargain opportunities for investors to take advantage of and we believe this will drive market performance in the coming week,” they stated.
Cowry Asset Management in its weekly review, said: This week, we expect the local bourse to close flat as investors take advantage of the low prices of some fundamentally sound stocks amid anticipated positive quarter two, Q2, companies’ earnings.
Meanwhile, there was a significant spike in volume and value of trades for the week by 96.91 percent and 429.16 percent to 2.70 billion units and N84.78 billion, respectively despite the negative market sentiment. This was on the back of an off-market trade, where 1.14 billion units of Stanbic IBTC Holdings Plc’s shares crossed at N53.75 in eight deals to Stanbic Africa Holdings Limited, a wholly owned subsidiary of Standard Bank Group Limited and parent company of Stanbic IBTC Holdings Plc.