May 13, 2019

Analysts anticipate dim equity market outlook as investors lose N137bn

Nigerian Stock Exchange

Tip insurance stocks to watch

By Peter Egwuatu

AS the equity market ended bearish last week resulting to investors losing over N137 billion in five trading days, analysts have predicted that the market outlook for this week is likely to dim, even as they cautioned investors to take advantage of the falling prices to boost their portfolios. They further tipped insurance stocks to be the stock to watch this week following their low trading prices.

Analysts at Vetiva Capital Management in its market reaction said: “As the Nigerian Stock Exchange, NSE All Share Index, ASI continues to trade comfortably below 30,000 points, the outlook appears dim. However, we expect investors to take advantage of beaten down prices at week open but do not rule out the possibility of further sell-offs.”

On the stock to watch, the analysts opined: “After losing earlier last week, Sovereign Insurance Plc gained 870 bases points, bps, Friday, to settle at N0.25 as investors took advantage of the price. The Insurance sector declined 322bps in the two opening sessions of the week after which we saw bargain hunting in the following sessions. The stock has gained 19 percent Year to Date, YtD, while the sector has shed 6 percent YtD. Other stocks include Nem Insurance and Prestige Assurance gaining 8.7 percent and 7.7 percent respectively.”

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Analysts at Cowry Asset Management in their reaction said: “In the new week, we expect the local equities market to close marginally in green territory amid announcement of the reappointment of the CBN Governor by President Buhari and the readiness signalled by MTN to list on the local bourse, given the registration of its 20 billion shares with Securities and Exchange Commission, SEC. Hence, we feel investors would take advantage of the low share prices to maximize their returns.

Meanwhile, analysis of trading last week showed that investors lost over N137 billion as market capitalisation which represents investors’ worth on the Exchange declined to N10.842 trillion from N10.979 trillion recorded penultimate week.

Similarly, another stock market gauge, the ASI declined to 28,847.81 points from 29,212.00 points recorded penultimate week. Amid sustained profit taking, all of the five indices closed in negative territory: NSE Banking, NSE Insurance, NSE Consumer Goods, NSE Oil/Gas and NSE Industrial indices fell by 2.77 percent, 1.74 percent, 0.23 percent, 5.29 percent and 0.36 percent to 370.27 points, 118.63 points, 669.53 points, 264.90 points and 1,096.75 points respectively.