…Analysts move for cautious trading

By Peter Egwuatu

EQUITY rally continued on the Nigerian Stock Exchange, NSE, last week following the resumption of ministers to their various portfolios. Consequently, investors’ loss moderated Year-to-Date, YtD, to 11.5 percent from 12.09 percent. Notwithstanding the rally, analysts have moved for cautious trading this week arguing that the upward trend was not motivated by any macroeconomic factor and, therefore, may not be sustained.

Nigerian Stock Exchange
Nigerian Stock Exchange

Reacting to the market development, analysts at Cordros Securities Limited said: “Our view continues to favour cautious trading owing to the fact that the gains recorded last week were not broad-based. However, compelling valuations support recovery in the medium to long term.”

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Reacting as well, analysts at Cowry Asset Management Limited, said: “In the new week, we expect the domestic bourse to close in green territory as investors’ renewed interest is likely to be sustained amid interim dividend declaration by the leading tier-1 banks. Hence, we expect value investors to continue to take advantage of the low share prices and hold relatively long positions in order to partake in the high yielding dividend returns. Meanwhile, it was evident that the delay by the President to constitute his ministers caused jitters amongst investors and threatened growth prospects, given that the equities market rebounded by 3.25 percent in three days after the President’s cabinet was activated.”

Analysis of the market show the NSE All-Share Index and market capitalization appreciated by 3.07 percent and 3.25 percent  to close the week at 27,800.17 and N13.524 trillion respectively. Similarly, all other indices finished higher with the exception of NSE Insurance Index which depreciated by 1.38 percent while the NSE ASeM index closed flat.

A total turnover of 2.337 billion shares worth N19.712 billion in 18,379 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 726.607 million shares valued at N10.459 billion that exchanged hands penultimate week in 12,915 deals.



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