By Peter Egwuatu
Analysts have projected that the second quarter 2022, Q2’22, is expected to record mixed trend in stock market outlook due to rising inflation and global oil prices occasioned by the ongoing Russia and Ukraine war.
The analysts further opined that they expect trading in stock market this week April 2022 to close in negative territory as more companies share price are market down for dividend declaration.
Meanwhile, analysis of the market last week showed that bearish sentiments persisted on the Nigerian Exchange Limited, NGX for the third consecutive week as profit-taking activities dominated market performance with the benchmark index recording losses in three of the five trading session last week.
Consequently, the NGX All-Share Index, ASI ended the week 0.3% lower to close at 46,842.86 points from 46,964.23 points the previous week.
In the same way another major performance indicator, market capitalisation declined by over N58 billion to close at N25.253 trillion from N25.311 trillion the previous week.
Analysis of transactions show that Total Energies declined by 10.0%, Nigerian Breweries 9.1% , International Breweries 8.1% , Guaranty Trust Holding 7.1% and Zenith Bank 7.1% to drive the weekly loss. The Month to Date, MtD and Year to Date, YtD return declined by 0.3% and up 9.7%, respectively.
Activity levels were mixed, as trading volumes increased by 9.6% Week on Week, W/W while trading value declined by 18.4% W/W.
Commenting on market performance, analysts at Cordros Research said: “We expect the weak sentiments that dominated the local bourse this week to persist in the week ahead, as investors continue to scale down exposure to equities following the mark down of share prices for 2021FY dividends amidst expectations of uptick in FI yields. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”
In their own reactions, analysts at InvestData Consulting stated: “The mixed trend seen in the market is expected to continue in the new month and quarter, even as market outlook remains mixed and dicey due to the rising inflation, mismatch in policies, high cost of production, change consumption pattern and concern over Ukraine war, even as yields in the fixed income market try looking up.
“We see the anticipated economic data and Q1 numbers in the new month strengthening recovery, despite the rising inflation, insecurity and flat liquidity. However, CBN extension of intervention funds single digit interest rate to next will support some of the sector’s activities and performance in 2022.”
Also reacting analysts at Cowry Asset Research stated: “In the new week, we expect the domestic equities market index to close in negative territory as more companies share prices are marked down for dividend qualification. However, we feel that investors would use this opportunity to accumulate stocks with string fundamentals.”