By Peter Egwuatu

Stock market sentiment  returned negative last week, buoyed by investors’ reaction to the Central Bank of Nigeria, CBN’s, decision to maintain the Monetary Policy Rate at 27.5%.

The reversal also came with profit-taking in stocks that may have recorded outstanding performance as well as a shift in capital flows toward the fixed income market.

The heavy sell off of shares resulted to the benchmark, Nigerian Exchange Limited, NGX All Share Index, ASI declining by 0.6% to close at 109,028.62 points from 109,710.37 points. 

Specifically, the losses    recorded by Transcorp Hotel -15.0%, Transnational Corporation -4.4%, Access Corporation 8.1%, and Fidelity Bank -10.3%) contributed majorly to the decline in ASI.

It should be noted that within the week under review, there were selling pressures in Fidelity Bank in apparent reaction to news that broke out last week Monday about a possible winding down action arising from a judgement debt, which the bank explained in a statement through the Nigerian Exchange Limited portal early on Tuesday morning.

Consequently, Month-to-Date, MtD and Year-to-Date, YtD returns moderated to 3.1% and 5.9%, respectively.

Market analysis further showed that, despite the bearish mood, trading volume and value increased by 43.2% and 11.0%    Week on Week, W/W, respectively.

Meanwhile, sectoral performance was mixed, as the Oil & Gas Index declined by -3.4% and Banking    Index -1.5% , while the Consumer Goods    Index up by 2.2% , Insurance Index 0.7%, and Industrial Goods Index 0.7%.

In their projection for the week, analysts at Cordros stated:    “Looking ahead, we expect cautious trading to persist amid a lack of clear positive catalysts, with profit-taking in recent gainers offset by bargain hunting in beaten-down names. In the medium term, we expect sentiment to be shaped by macroeconomic trends and movement in fixed income yields.

Meanwhile, analyst at InvesData Consulting said:    “Investors need to be cautious at the current oscillating market in the midst of earnings season, portfolio reshuffling, and repositioning as we await an economic reform policy that can stimulate and re-track the economy to the path of growth and development”.