By Peter Egwuatu 

Analysts have warned stock market investors to trade cautiously as sentiments would depend on the Central Bank of Nigeria, CBN’s monetary policy decision this week.

Meanwhile, trading on the Nigerian Exchange Limited, NGX,  extended its positive momentum last   week, marking the fourth consecutive week of gains as investors reacted to the April inflation report and global trade developments. Specifically, the NGX All-Share Index (ASI) advanced by 0.9% Week on Week, W/W to close at 109,710.37 points from 108,733.40 points the previous week.

The positive performance was supported by strong performances from Oando shares , which gained   20.7%, Transcorp   shares 6.0%, Trandcorp Hotel shares 6.2%,   Nestle shares 10.0%,   and Access Holdings shares 10.3%, to push the Month-to-Date, MtD and Year-to-Date, YtD returns to 3.7% and 6.6%, respectively.  

On the W/W, market capitalisation, which shows the total value of stocks on the Exchange gained over N461 billion to close at N68.800 trillion from N68.339 the previous week.

Meanwhile, trading volume increased by 3.8% W/W, while trading value fell by 12.5% W/W. Generally, sector performances were positive, as the Consumer Goods Index grew by 4.1%,   Insurance Index 2.5%, Banking Index 1.2%, Oil & Gas 0.7% and Industrial Goods Index   0.1%.  

Meanwhile, commenting on the inflation figure released last week and the effect on the market and economy , former President of Chartered Institute of Stockbrokers, CIS, Olatunde Amolegbe, said: “Investors should trade cautiously. Well the fact that the inflation rate showed a slight decline is a welcome relief I guess. But it’s clear we do not have a trend in terms of general direction of the rate yet as it has been fluctuating up and down in the last four months.

“This could be the reason why the Monetary Policy Committee, MPC has not yet adjusted its stance regarding monetary policy for now. For the month of April the decline in aggregate rate can be attributed to relatively lower food prices probably due to harvest season as well as increased inflow of imported grains. The relatively stable energy price also played a role in the decline. We will need to see consistent drop in rates over the next few months before citizens can start heaving a sigh of relief.”

Reacting on market outlook,   analysts at Cordros Research stated: “This week, market sentiment is likely to hinge on the CBN’s monetary policy decision, with cautious trading expected as investors assess the broader macroeconomic backdrop. However, we do not rule out sustained bargain-hunting, particularly in Consumer Goods stocks, as risk-on sentiment gradually reemerges amid easing global trade tensions.”