Nigerian Stock Exchange

By Nkiruka Nnorom

Profit taking in some blue chip stocks, including BUA Cement Plc, MTN Communication Nigeria Plc and some banking stocks, yesterday dragged the equities market to the red zone with investors losing N119 billion.

Analysis of the day’s trading showed that the benchmark All Share Index (ASI) slipped by 0.9 percent after BUA Cement and MTN recorded 1.8 percent and 1.7 percent losses respectively.

Also, sell-off in three tier-1 banking stocks – United Bank for Africa (UBA) Plc (-5.19%), Zenith Bank Plc (-2.70%) and FBN Holdings Plc (-1.87%) added to the negative returns.

Consequently, the ASI closed lower at 24,954.32 points, while the equities market capitalisation declined to N 13.018 trillion from N 13.137 trillion on Thursday.

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Meanwhile, capital market operators expect a positive performance in the market this week despite the negative sentiment yesterday.

Analysts at Cordros Capital maintained a cautious outlook, advising investors seek trading opportunities in only fundamentally justified stocks, arguing that risks remain on the horizon owing to a combination of increasing number of COVID-19 cases and weak economic conditions in Nigeria.

In their own projections, analysts at Cowry Asset Management, said: “We expect the domestic equities market to close positively amid positive developments in the external sector.

“Hence, we advise investors to buy stocks with strong fundamentals and good dividend yields. Also, we expect buy interest in the healthcare sector as the industry is set to benefit from government interventions amid COVID-19 pandemic.” For analysts at United Capital Plc, the market would remain volatile, “as investors lock funds in cheap and fundamentally sound stocks, while taking profit on some stocks that gained last week.”

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