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Analysts project momentary positive rally over portfolio realignment

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•As NSE migrates REITs, CEFs to Main Board

By Nkiruka Nnorom

The equities market may be up for a momentary rally this week and in the remaining part of this year following expected end of year portfolio repositioning by investors, investment analysts have said.

However, the over-hang of jitters in the political environment may negate the expected positive sentiment, according to some analysts, who doubt the envisaged rally.

Nigerian Stock Exchange

In their prognosis into the week, analysts at United Capital, an investment banking firm, explained that having reached an oversold region, the equities market may experience some sort of reprieve in the coming weeks to record positive changes.

They, however, said that the possibility of an unprecedented rally could be capped by the overhang of jitters in the polity.

The domestic equities market shrugged off the positive Gross Domestic Product, GDP, data released at the start of last week by the National Bureau of Statistics, NBS, to sustain its losses for the second consecutive week in December.

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The sustained negative sentiment resulted in a dip in the All Share Index, ASI, by 0.6 percent to 30,672.79 points.

Similarly, the equities capitalisation fell by N61.81 billion or 0.6 percent to close at N11.21 trillion.

Also reiterating the negative close, David Adonri, Managing Director/CEO, Highcap Securities, said: “Although the equities market is difficult to predict in the short term, there are indications that the market may experience traditional slowdown which occurs during Christmas.”

In their own view, analysts at Cowry Asset Management projected a marginal decline owing to bargain hunting by investors given the increasing political risk and higher returns on fixed income assets.

Meanwhile, the Nigerian Stock Exchange, NSE, Friday migrated the Real Estate Investment Trusts, REITs, and Closed-End Funds, CEFs, from the Main Board to a separate Board under the equities segment, a move aimed at promoting visibility and liquidity of REITs and CEFs in the market.

The migration, according to the Exchange, follows an earlier notification on a restructuring of the framework regarding the trading of REITs and CEFs listed on its platform.

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