Ahead of the Santa Claus and year-end rally, analysts expect that the Nigerian stock market will close positive this week.
Analysts’ Optimism
Analysts at Afrinvest Limited stated that, “this trading week, we expect the market to extend last week’s positive performance, driven by bargain purchase as investors continue to review their portfolio for the next year.”
In the new week, analysts at Cowry Assets Management Limited expected the local stock market to be bullish ahead of the usual Santa Claus rally and corporate actions.
Also, Cordros Securities Limited expects market performance to be dominated by the bulls in the week ahead, as positioning by early birds in dividend-paying stocks ahead of 2021 full year dividend declarations should outweigh profit-taking activities.
“Notwithstanding, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings,” it stated.
The chief operating officer of InvestData Consulting Limited, Ambrose Omordion said: “we expect the low liquidity and changing investment decision to keep the trend on this direction ahead of Santa Claus week as market players digest November consumer price index and happenings in fixed income market after the Nigerian Exchange (NGX) index action pulled back to trade above its 50-Day Moving Average on a low sell volume in the face of assets rebalancing and seasonality likely to influence stock prices ahead of year-end window dressing.”
He pointed out that, “the relatively low volume traded in the midst of retracement is creating new buy opportunities on the strength of the third quarter (Q3) numbers. Also, candlestick formation and volume traded during the session revealed that institutional players are not buying yet. It is equally noteworthy that during a ranging market many players seat on the fence waiting for a breakout or down before jumping into any position. 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 Activities
The domestic stock market closed northward amid renewed investor interest last week. Amid bargain hunting activity on the domestic bourse, the All-Share Index rose week-on-week (W-o-W) by 470.34 basis points or 1.12 per cent to close at 42,353.31 points. Similarly, market capitalisation rose by N253 billion W-o-W to close at N21.107 trillion.
Also, most of the sub-indices tracked closed in green. The NGX Insurance, NGX Consumer […]
