The Nigerian capital market expected equities to maintained previous week gain as retail investors increased their holdings in dividend paying stocks ahead of 2021 full year declarations.
Analysts Optimism
In the new week, analysts at Cowry Assets Management Limited expected the local bourse index to trade sideways as investors wait on the sidelines to take advantage of declining stock prices. We expect more sales from retail investors than the institutional investors as yuletide season beckons.
Also, Cordros Securities stated that, “in the week ahead, we expect market performance to be dominated by the bulls, as positioning by early birds in dividend-paying stocks ahead of 2021 full year dividend declarations should outweigh profit-taking activities.
“We reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.”
While analysts from Afrinvest Limited said: “this week, we expect the market to extend previous week’s positive performance on improved sentiment, barring any negative shock.”
The chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion said: “we expect a mixed trend to continue, as players digest the outcome of the latest Monetary Policy Committee meeting (MPC), ahead of Treasury Bills primary market auctions, with seasonality and cycles likely to influence equity prices ahead of year-end window dressing.
“The low volume traded in the midst of pullbacks is creating new buy opportunities on the strength of the third quarter (Q3) numbers. Also, candlestick formation and volume traded during the session revealed that institutional players are not selling but positioning in blue-chip companies, as the index slide on a light volume.”
According to him, it is equally noteworthy that during a ranging market many players seat on the fence waiting for a breakout or down before jumping into any position. Even as many stocks are trading within their buy ranges, a situation expected to attract more funds into the stock market, given the dividend yield capable of serving as a hedge against inflation.
Last Week’s Trading Activities
Last week, the Nigerian equities market closed positive amid renewed buy sentiment, especially on Telecoms stocks even as MTN International Mauritius offered for sale up to 575 million shares of its shareholding in MTN Nigeria Communications (MTNN) Plc to high-net-worth investors in Nigeria.Hence, the NGX All-Share Index rose week-on-week (W-o-W) by 109.02 points or 0.25 per cent to close at 43,308.29 points. Similarly, market capitalisation grew N54 billion W-o-W to close at N22.598 trillion.Reflective of non-broad-based performance […]