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Portfolio re-alignment, Q3 earnings may lift equities —Operators

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By Nkiruka Nnorom

Capital market operators have projected that end of year portfolio re-alignment by fund and portfolio managers may bring reprieve to equity investors this week and through the remaining part of the year.

They added that third quarter 2019, Q3’19, earning reports expectations would be another booster to the market this week.

Nigerian Stock Exchange

Meanwhile, amidst continued investor apathy and a lack of positive catalysts, the equities market continued to plummet, as the All Share Index (ASI) last weekend declined by 0.32 percent to close at 26,448.62 points.

Similarly, the market capitalisation fell by N42 billion or 0.32 percent to close N12.875 trillion against N12.917 trillion recorded previous week.

Analysing by sectors, activity was mixed as three of the five major sectors (banking, industrial goods and oil & gas) closed in red, while insurance and consumer goods sectors appreciated during the week.

NSE: Market capitalisation closes lower at N12.878trn(Opens in a new browser tab)

The banking sector recorded the biggest losses, depreciating by two percent. The industrial and oil & gas sectors were down 0.3 percent and 0.2 percent respectively.

Conversely, the insurance sector rose by 2.4 percent, while the consumer goods sector appreciated by 0.1 percent.

In their weekly review, analysts at Cowry Asset Management, a Lagos-based investment banking firm, said: “We expect the local bourse to close in green territory as more Q3 2019 companies results are expected to be released in the course of the week – although investors’ sentiments still remain weak given the perceived attractiveness of fixed investment yields.”

Corroborating, analysts at Cordros Capital said that  pockets of gains would be recorded over the final months of the year as fund and portfolio managers realign portfolios prior to the start of 2020.

They addedd that valuations have remained attractive driven by price deterioration throughout the year.

They, however, said that the trend witnessed through the year is likely to persist through the final quarter of the year and advised long term investors to consider appropriately timed investments.


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