By Nkiruka Nnorom
Operators in the capital market have said that the equities market will maintain the positive sentiment witnessed last week as more companies make the result of their 2018 financial year available to the investing public.
They, however, observed that sentiment is still largely weak due to unimpressive dividend yields, which, they said, is dampening sentiment at the moment.
Despite the losses seen in the last three sessions of the week, the Nigerian equities market closed the week on a positive note, with the benchmark All Share Index, ASI, rising by 0.3 percent to close at 31,924.51 points.
The equities capitalisation also rose by the same margin or N36 billion to settle at N11.905 trillion, a development market operators attributed to abating political risks, positive earnings releases and dividend declarations.
“The activities of this week were buoyed by the release of companies’ results, which showed positive performance, and the attractive dividend payment proposed by the firms. Also, with the presidential elections already held, the political uncertainty in the system moderated. Consequently, buying pressures prevailed as investors sought to take a position, owing to the low valuation of counters across the market,” analysts at Meristem Securities said of the trading activities last week.
In its projections for the week, Meristem Securities observed that buy pressure would cut across the five major sectors – banking, insurance, consumer goods, industrial goods and oil & gas – to cause a further upswing in the index.
Corroborating, analysts at Afrinvest Securities, said: “We expect market participants to react to earnings releases, but we believe that week-on-week, the market will rebound as investors position in cheap and fundamentally sound stocks.”
Analysts at Cordros Capital in their view, said that a blend of a compelling valuation story, together with positive macroeconomic picture leaves scope for a market recovery in the medium term, but advised investors to tread cautiously in the short term.
Meanwhile, all sector indices closed negative last week with the exception of the banking sector, which roes by 3.37 percent. The consumer goods, oil & gas, industrial goods, and the insurance sectors closed lower at 1.02 percent, 2.56 percent, 1.72 percent and 1.30 percent respectively.