Investors Positioning In Dividend-paying Stocks To Continue

Investors Positioning In Dividend-paying Stocks To Continue

Investors, this week will continue to position for dividend-paying stocks, triggering more bargain-hunting activities on the equities sector of the Nigerian Exchange Limited (NGX).

Analysts Optimism

In the short term, analysts at Cordros Securities Limited expected the bulls to continue to rotate their portfolio towards dividend-paying stocks ahead of 2021 full year dividend declarations, even as institutional investors continue to search for clues on the direction of yields in the fixed income (FI) market.

“However, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings,” they said.

In the new week, analysts at Cowry Assets Management Limited expected the equities market to sustain its bullish momentum as investors anticipate the release of corporates’ full year 2021 financial statements.

The chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion said “We expect the mixed trend to continue in the midst of profit taking and portfolio realignments by targeting fundamentally sound and dividend paying stocks in expectation of more audited corporate earnings, as oil price oscillates to trade at $89.88, which is one factor that also continues to support economic and market fundamentals.”

Last Week’s Trading Activities

The Nigerian stock market witnessed yet another bullish momentum last week as bargain hunters continued to show preference for companies with increased profitability year-on-year. Also, investors’ appetite appeared to be stimulated by the not-too-long-to-be-announced dividend payments by corporates.

Hence, the All-Share Index rose strongly week-on-week (W-o-W) by 2.33 per cent to close at 47,279.92 points. Similarly, the market capitalization gained N579 billion W-o-W to close at N25.477 trillion.

Given the bullish sentiment, most sector gauges closed in green. The NGX Banking, NGX Oil & Gas, and the NGX Industrial indices rose by 0.83 per cent, 7.69 per cent and 3.41 per cent respectively to close at 443.10 points, 422.72 points and 2,137.00 points respectively. On the flip side, the NGX Insurance index and the NGX Consumer Goods index lost 1.93 per cent and 0.81 per cent to close at 183.09 points and 571.31 points respectively.

The market breadth for the week was positive as 42 equities appreciated in price, 35 equities depreciated in price, while 79 equities remained unchanged. RT Briscoes led the gainers table by 40.00 per cent to close at 28 kobo, per share. Academy Press followed with a gain of 31.91 per cent to close at N1.24, while Conoil went up by 20.73 per cent […]

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