By Nkiruka Nnorom
Investment analysts have said that the equities market will sustain its two week positive sentiment following positioning by investors ahead of half year (H1) 2021 corporate results announcements and dividend declarations.
They also see heightening of buy interest in equities following the moderation in interest rates in the money market in the weeks ahead, a speculation which may have led to a significant investors’ gain of N224 billion last week.
Average yields across all instruments in the Treasury Bills (TBs) secondary market contracted by 13 basis points (bps) to 8.27 percent last week. Across the market segments, the average yield at the Open Market Operation, OMO, Treasury Bills segment declined by 33bps to 9.7 percent.
In contrast, average yields at the primary segment of the Nigeria Treasury Bill (NTB) sustained its bearish run and expanded by 10bps to 6.4 percent.
Accordingly, analysts at Cowry Asset Management posited that the equities market would trade positively as investors position in stocks of companies which have good fundamentals and are expected to pay interim dividend. “Also, we have seen that stop rates at the money market remain relatively flat. Further moderation in that space may trigger buy sentiment in the equities market,” they said.
In their own views, analysts at Cordros Capital, said: “We expect investors to continue cherry-picking stocks ahead of the H1-2021 dividend declarations. With the recent development in the fixed income (FI) market, we are approaching an inflexion point.
“We, therefore, see scope for increased buying interest from risk-averse investors.”
Meanwhile, the market continued its upward trajectory last week in line with analysts expectations, resulting in 1.11 percent increase in both the All Share Index (ASI) and the market capitalisation.
Specifically, the benchmark index rose to 39,156.28 points driven by bargain hunting in Okomu Oil Plc (+20.7%), Stanbic IBTC Holdings Plc (+6.1%), Flour Mills of Nigeria Plc (+5.3%), Dangote Cement Plc (+4.6%) and Dangote Sugar Refinery Plc (+4.4%).
Consequently, the Month-to-Date (MTD) return rose to 1.9 percent, while the Year-to-Data (YTD) loss moderated to -2.8 percent.
The market capitalisationof all listed equities advanced by the same margin to close at N20.409 trillion.
Activity levels were, however, mixed as trading volume declined by 2.2 percent to 1.058 billion units, while trading value rose by 34.4 percent to N12.831 billion.
Sectoral performance was broadly positive as the industrial goods sector led the gainers chart, rising by +2.4 percent. This was followed by the oil and gas sector which rose by 1.4 percent, while the consumer goods and the banking sectors appreciated by 1.1 percent and 0.9 percent respectively.
The insurance sector emerged the lone loser, dropping by 4.1 percent.