Capital market analysts said, following the latest trend in the Nigerian equities space, the market is likely to see mixed trading this week.
Speaking on market performance for this week, analysts at Cordros Securities Limited said: “we expect investors to rebalance their portfolios based on an assessment of corporate earnings released for third quarter (Q3), 2021. As a result, we expect market performance to remain mixed in the week ahead as investors rotate their portfolios towards dividend-paying stocks amid intermittent profit-taking activities.
“Overall, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.”
This week, analysts at Afrinvest Limited expected sell pressure to dominate the market barring any positive catalyst. However, analysts at Cowry Assets Management Limited Cowry Research expected “the local bourse index to close northwards as investors respond positively to the proposed sale of 575 million units of MTN shares to institutional and retail investors. Also, we feel investors will also position in those companies that have printed higher profitability and are likely to pay good dividends in full year, 2021.”
The chief operating officer of InvestData Consulting Limited noted that, the bearish sentiment and weak momentum since the beginning of November were due to selloffs and profit-taking across major sectors and equities that had recently rallied in the midst of impressive corporate earnings and positive macroeconomic indices, saying, these point to a better market that will support prices in the short to long run as players reposition their portfolios ahead of seasonality like the Santa Claus rally and others in the remaining sessions of the year 2021.
According to Omordion, the prevailing low traded volume in the market indicates that the sentiments that took the market up are still intact, despite the ongoing profit-taking and selloffs which is part of the market dynamics that are yet to be understood by many retail investors.
On market outlook, he stated that, “we expect the mixed trend to continue as price corrections create buy opportunities into value stocks on the strength of their strong Q3 earnings power. Also, we note that institutional players are not selling yet, as they watch the pullback on a light volume. It is equally noteworthy that this 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 […]