Investment analysts have said that activities in the nation’s stock market will be bullish this week over positioning by investors in interim dividend stocks.
They posited that the market provides ample opportunity for capital gains but advised investors to position in only fundamentally sound stocks. According to analysts at Cowry Assets Management Limited, in the new week, we expect the equities market index to trade positively as investors position ahead of qualification period for interim dividend payment.
Also, Cordros Securities Limited said that, “This week, we expect earnings from the big banks, specifically Guaranty Trust Bank Holding Company (GTCO) and United Bank for Africa (UBA) to drive buying sentiments on the bourse, as the declaration of interim dividends may likely accompany the results.
“Overall, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”
The chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion said that “We expect a mixed trend as market players take advantage of the correction to position as many stocks enter their buy range to attract funds into the equity space, just as institutional investors and others digest the second quarter (Q2) GDP growth ahead of more first-tier banks results, as well as the continued repositioning of portfolios for the year last quarter.”
Omordion also noted that investors are still observing the interplay of forces in the FX market as the Central Bank of Nigeria (CBN) gives a guideline for the new digital currency platform. The day’s low volume suggests that institutional investors and others are still cautiously looking at the numbers. It is noteworthy that oil prices rebounded in the international market; corporate actions, as well as the interim dividend possibilities, are around the corner.
Meanwhile, last week, bearish sentiments dominated the market with the local bourse recording losses in three of the five trading sessions of the week, following sell-offs of large cap stocks including Nigerian Breweries, Dangote Cement and Zenith Bank.
Consequently, the All-Share Index (ASI) shed 224.64 points or 0.57 per cent week-on-week (W-o-W) to close at 39,261.01 points. Similarly, market capitalisation decreased by N117 billion to close at N20.456 trillion.
Specifically, the release of the positive first half (H1) 2021 financial result and the 30 kobo interim dividend declared by Access Bank appears not to have stimulated investor’s interest as banking sector index closed in red, decreasing by 0.58 per cent to 376.79 points.
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