July 2, 2018

Equities market rebound to persist amidst expected half year earnings



By Peter Egwuatu

RENEWED investors interest witnessed last week in the equities market on the Nigerian Stock Exchange, NSE may be sustained this week amid expected half year corporate results.

Since companies are expected to start turning in their half year results, H1’18, from this week, it is expected that many investors will take positions on stocks with favourable prices.

Financial analysts expressed mixed opinions in their forecast for this week’s expectation about the stock market. For instance, analysts at Cowry Asset Management Limited in its projections said: “This week, we expect bargain hunting activities to be sustained as investors maintain interest amid expectations of better half year results coupled with the kick off of the Pension multi-fund structure in July 2018.”

Nigerian Stock Exchange

Analysts at Vetiva Capital Management Limited in its projections said: “In spite of today’s (Friday) positive close, we note that underlying market sentiment remains weak and we expect this to remain dominant in the coming week, thus steering a mixed trading session.”

Commenting on stocks to watch, Vetiva said; “The NSE is set to carry out its semi-annual review of its indices next week. The companies likely to be included in the NSE 30 are FCMB, Oando, BETAGLAS, UACN and Sterling Bank whilst Diamond Bank, Julius Berger, Forte Oil, Transcop and Dangote Flour might exit the index. We expect to see increased activity on these stocks next week as fund managers adjust their positions accordingly.”

Analysts at Afrinvest Research said: “The reversal in the  performance in the equities market this week is largely in line with our expectation of a rebound on the back of gains in bellwethers. In the coming week, we expect a further rally by investors seeking to take positions in stocks trading at attractive  prices.” Last week, the Nigerian Stock Exchange, All Share Index t rose week-on-week (W-o-W) by 1.10 percent  as investors interest was renewed amid expected half year results and the kick off of the Pension multi-fund structure in July. The N150.70 billion added to the value of equities was reflected in the increase of the overall market performance measure, NSE ASI, by 110 bases points, bps to close at 38,278.55 points. In the same vein, most sectore gauges rose: the NSE Insurance index, NSE Consumer Goods Index and NSE Industrial Index increased by 0.66 percent, 2.69 percent and 2.67 percent respectively to close at 150.44 points, 927.72 points and 2,008.70 points respectively. However, the NSE Banking Index and NSE Oil/Gas Index fell by 1.09 percent  and 1.73 percent to close at 476.05 points and 323.22 points respectively.