Closes positive last week

By Nkiruka Nnorom

CAPITAL market operators and investment bankers have projected that the equities market will record another positive close this week riding on the back of impressive first quarter 2018 (Q1’18) financial results released by quoted companies last week.

They noted that low yield in fixed income instruments and continuous improvement in the macro-economy would provide additional support to the rally expected in the market.

In his comments, Mr. Ezekiel Oluyole, Managing Director/Chief Executive Officer, Investment One Securities Limited, said that the market has relatively been stable and the stability is expected to continue baring any negative news.

Support for equities market

He stated: “The market has been relatively stable for the past two to three weeks and I think we will still see that stability next week (this week). But as more Q1 results are released, (some of the Tier 1 banks have released their results and they are largely in line with management guidance) we will continue to see the stability.

“Also, the rate at the money market has been trending down these days and so that should provide a support for equities market and as dividends are paid, we may also see that some investors are likely to reinvest their dividend and that will also pave way for the market.”

Making prognosis into the week, analysts at Cowry Asset Management Plc said: “This week, we expect the local bourse to close in the green territory as investors positively react to the impressive first quarter corporate earnings released so far.”

Cordros Capital Limited, in their analysis, stated that there would be an extension of the gains recorded in the previous week. According to them, significant drop in fixed income yields, and relatively lower prices of risky assets would fuel further demand in equities by investors.

In his own view, Mr. David Adonri, Managing Director, Highcap Securities, said that the market would continue to react based on the disclosures that would be made. “If the results continue to be impressive, of course, the market will react and go up, but if the results are not impressive, because there is nothing out there to drive the market now rather than corporate disclosures, the market will also react accordingly”, he stated.

Meanwhile, activity in the market was mixed last week with three sessions of gains against two sessions of losses. Consequently, the All Share Index, ASI, rose by 1.05 percent to close at 41,244.89 points from 40,814.89 points.

Also, the market capitalisation advanced by N197 billion or 1.3 percent to close at N14.940 trillion from N14.743 trillion in the previous week.

Sectoral analysis showed that the consumer goods sector posted the highest gains in the week, rising by 6.30 percent on the back of 13.53 percent increase in Nestle Nigeria Plc. This was followed by the oil and gas and the banking sectors, which rose by 3.25 percent and 0.67 percent respectively. Activity in the banking and oil and gas sector were driven by United Bank for Africa that appreciated by 3.57 percent and Forte Oil Plc that advanced by 20.69 percent.

The industrial goods and insurance sectors shed 4.89 percent and 1.41 percent respectively on account of 1.80 percent and 17.24 percent decline in Dangote Cement Plc and Mutual Benefit Assurance Plc respectively.