Investment analysts have stated that the release of third quarter (Q3) or nine months earnings reports by quoted companies will sustain the positive sentiment in the Nigerian stock market.
Cordros Securities Limited said: “in the week, we expect NGX’s floor to be flooded with results as the Q3, 2021 earnings season commences in full swing. We believe investors will be focused on gauging the extent to which recovery in economic activities has supported corporate earnings.
“Thus, the local bourse is likely to close positive as we expect decent earnings releases across board to temper selling activities. 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 the new week, analysts at Cowry Assets Management expect the local bourse index to close northwards as companies begin to release nine months 2021 financial results which “we anticipate to be largely positive.”
Afrinvest Limited also said: “in the coming week, we expect market performance to remain upbeat as investors take position ahead of upcoming Q3, 2021 earnings releases.”
On the market outlook, the chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion explained that, “we expect an uptrend as selloffs hit short-term fixed income market instrument amidst players’ repositioning for Q3 earnings season and year-end, also react to these numbers, as more quarterly corporate earnings are expected to hit the market.
“Just as candlestick formation and volume traded revealed that trend was intact as institutional players are not selling. It is equally noteworthy that any pullback at this level is for the accumulation of more positions ahead of year-end seasonality. Also, many stocks are trading within their buy ranges, a situation expected to attract more funds into the equity space, given the Dividend Yield capable of serving as a hedge against inflation.”
According to Ambrose, institutional investors and others continue to digest recently release economic data, the outcome of the Treasury bill auction was 91 and 182 days tenor rate remained unchanged and 364 days slightly down by 25 points to 7.25 per cent for a whole one year ahead of earnings season portfolios repositioning.
“Also, investors are still observing the interplay of forces in the FX market as the CBN’s new digital currency platform. The low volume seen in the market suggests that institutional investors are not making a sell move yet in the market, as they look at the economic data and […]
