By Peter Egwuatu 

Cautious trading trailed the equities market last week on the Nigerian Exchange Limited, NGX, amidst profit taking leading to the drop in the major stock market indicator, All Share Index by 0.2 % to 47,202.30 points from 47,279.92 points the previous week.

Analysis of the market showed that  the five-week bullish run came to a halt last week, as investors took profits off dividend-paying stocks.  

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Precisely, the local bourse recorded losses in three of the five trading sessions of the week.

  Accordingly, the Month-to-Date, MtD and Year-to-Date,   YtD returns moderated to +1.2% and +10.5%, respectively.

Activity levels were mixed as volume traded declined by 25.4%   Week-on-Week, WoW while value traded rose by 15.4% WoW.  

Meanwhile, analysts have predicted that  the negative return on Fixed Income, FI, and some positive earnings results of fourth quarter, 2021 and audited full year announcement expected from corporates may spike investors’ interest in equities this week.

Analysts noted that the positive vibes among players for equities would increase, especially at this earnings season that numbers are looking up in the midst of positive economic data, despite the uptick in December inflation as the market looks forward to release of the January consumer price index next week.

On market outlook, analysts at InvestData Consulting Limited, said:”

We expect the negative return in fixed income instruments to further boost the positive vibes during this earnings season as more audited financials with corporate actions start hitting the market in the midst of profit taking and portfolio rebalancing. This is will result in market players targeting fundamentally sound and dividend paying stocks in hope of dividend announcements, as oil trades at $91pb, just as inflation rate remains high at 15.63%, while the International Monetary Fund is calling for hike in interest rate and further devaluation of Naira.”

Commenting as well analyts at Cordros Research stated :” In the coming week, we expect investors to take advantage of the moderation in the share prices to make a re-entry in dividend-paying stocks ahead of subsequent 2021FY earnings releases. However, we believe investors will remain reluctant to leave gains in the market. As such, we expect intermittent profit-taking to continue due to uncertainties about the direction of yields in the FI market. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”