Analysts have said trading activities on the Nigerian stock market will be driven by the outcome of the Monetary Policy Committee (MPC) meeting.
The MPC is expected to hold its first meeting of the year on the 24th and 25th of January 2022.
Analysts expect the Committee to assess global growth prospects for the year within the context of rising cases of the Omicron variant amid the ongoing unwinding of monetary stimulus by global central banks.
On the domestic front, they expect that the uptick in headline inflation in December will likely stir up a debate among Committee members about whether it was a blip or a trend that will persist in the coming months, saying, “all in, we expect the Committee to retain the MPR at 11.5 per cent alongside other monetary policy parameters.”
Analysts Optimism
In the week ahead, analysts at Cordros Securities Limited believe investors will be focused on the outcome of the MPC meeting to gain further clarity on the movement of yields in the fixed income (FI) market.
“Consequently, we expect a ‘choppy theme’ as cautious trading will likely dominate the market. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings,” they stated
In the new week, analysts at Cowry Assets Management Limited expected the equities market index to move northward amid positive investor’s sentiment, saying, investors are expected to invest more in the equities market if MPC holds rate constant.
The chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion said: “we expect a mixed sentiment to continue on positioning in fundamentally sound stocks and profit taking, as rallying oil price support economic and market fundamentals. Also, investors are targeting dividend paying stocks as they reposition portfolio ahead of fourth quarter (Q4), 2021 and full-year audited earnings reports that may start hitting the market any moment from now.”
He added that “with all eyes on MPC meeting outcome, as inflation reversed up to 15.62 per cent and other economic data. 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 ActivitiesThe stock market last week sustained its positive trajectory as Dangote Cement completed its share buy-back programme of 107 million share units. The All-Share Index up week-on-week (W-o-W) by 3.38 per […]
