The stock market closed bearish last weekend amid energy crises during the week following sharp rises in the price of petrol to between N855 and N1,000 per litre from about N600 per litre, a development that was condemned by the private sector over possible adverse impact on businesses.
Analysts opined that the economic reforms of the government, measured by the fiscal and monetary policies are yet to put the nation’s economy on the path of recovery and growth.
A review of the performance of the market showed that the Nigerian Exchange Limited, NGX All-Share Index (ASI), a major indicator declined by 0.2% to close last week at 96,433. 53 points from 96,579.54 points the previous week.
Similarly, another major performance gauge, market capitalisation dropped by over N83 billion to close at N55.394 trillion from N55.477 trillion.
The profit-taking activities in Dangote Sugar resulted to a decline in its price by 5.5% followed by Zenith Bank 2.0% and WAPCO 3.5% among others which triggered the decline in ASI.
Consequently, the Year-to-Date (YtD) return moderated to +29.0%. Activity levels also remained subdued, with total trading volume and value falling by 23.7% Week on Week, W/W and 3.3% W/W, respectively.
Analysing by sectors, the Insurance Index declined by 4.5%, Consumer Goods Index 1.2%, the Industrial Goods Index 0.2% and the Banking Index 0.1% while the Oil and Gas Index went up by 1.5%.
In their projection for the market this week, analysts at Cordros Research stated: “We anticipate a mix of cautious trading and selective buying as market participants watch out for any signs of broader market interest. However, we acknowledge the likelihood of profit-taking activities on stocks that have experienced notable appreciation in recent weeks”.
On their own market outlook, analysts at InvestData Consulting said: “We expect mixed sentiment on bargain hunting on pullbacks and banks interim dividend-paying stocks in expectation of their half-year numbers as sector rotation continues in the market. Portfolio repositioning is however continuing, with investors taking advantage of pullbacks to buy into value.
This is amid the volatility and pullbacks that add more strength to the upside potential. Consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically”.
