Despite the positive sentiment recorded in the equities market at week close on Friday, investment experts and other capital market operators have said that the market will remain in the negative region as the Friday positive run was not driven by any fundamental. Stock Market They argued that underlying investors’ apathy still remained, thereby negating the likelihood of a sustained upward movement.
After posting ten straight days of negative closes, the All Share Index, ASI, recorded a 1.87 percent rebound at week close following a strong recovery in industrial goods sector, driven by buy pressure in Dangote Cement Plc’s shares.
However, the gain was not enough to offset the earlier losses with the ASI declining by 0.5 percent to 35,266.29 points.
Similarly, the market capitalisation of all listed equities fell by N66 billion or 0.5 percent to close at N12.875 trillion from N12.941 trillion in the preceding week.
“For the first time in almost two weeks, the market closed in the positive territory on Friday and the reasons are not far fetched. The market is very dynamic; it has periods of ups and downs. So, that basically is what we experienced on Friday. However, there was high demand for Dangote Cement shares and so the share price went up so high and that made the market to move up,” said Charles Fakrogha, Chief Relationship Officer/stockbroker at Foresight Securities.
He stated that though the increase may extend to Monday, but a reversal to the negative territory would likely be seen after the public holidays owing to lack of fundamentals to sustain the northward move.
Corroborating, analysts at Vetiva Capital said: “Despite the Dangote Cement driven recovery witnessed at week close, we foresee a return to negative territory by next week given that underlying investor apathy remains in the market. Nonetheless, we expect milder losses at the start of the week.”
In their review for the week, Cordros Capital, another investment banking firm, said that sell-offs are likely to persist in the short to medium term in the absence of a near-term positive trigger and brewing political concerns.
Review of sectoral activities last week, showed that only the industrial goods sector buoyed by Dangote Cement appreciated during the week, rising by 1.29 percent, while the banking sector recorded the highest losses of 3.80 percent on account of 11.64 percent decline in the shares of United Bank for Africa, UBA Plc. Related