Stock Market To Rebound On GDP Growth, Declining Inflation Rates

Stock Market To Rebound On GDP Growth, Declining Inflation Rates

Nigerian capital market analysts expected the stock market to close positive this week following growth in Gross Domestic Product(GDP) rate and declining inflation rate.

Market Observers’ Optimism

According to Cowry Assets Management Limited, in the new week, the local bourse index will close positively as investors respond to the newly released positive economic numbers such as good growth in GDP rate and declining inflation rate. Also, we feel investors will continue to position in those companies that have sound fundamentals.

The chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion said: “the positive economic data and better than expected corporate earnings are a plus for the market, notwithstanding the likely outcome of the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) meeting this week, just as the nation’s GDP has maintained consistent recovery to reveal potentials in the different sectors of the economy as a guide to investors while positioning for the new year.”

Analysts at Cordros Securities Limited said: “in the week ahead, we expect a mixed market performance as the bulls and bears are likely to be in a gridlock due to the opposing forces of bargain-hunting activities in stocks with attractive dividend yields ahead of 2021 full year dividend declarations and intermittent profit taking activities.

“Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings.”

However, analysts at Afrinvest Limited said: “this week, we expect a poor performance as weak sentiment lingers.”

Last Week’s Trading Activities

Bearish sentiments dominated the local bourse last week, as the market recorded losses on four of the five trading sessions following profit-taking activities. Accordingly, the All-Share Index (ASI) declined 53.74 points or 0.12 per cent week-on-week (W-o-W) to 43,199.27 points. Similarly, market capitalisation shed N28 billion W-o-W to close at N22.554 trillion.

Also, the sub-sector gauges mirrored the benchmark index as most of the indices closed southwards. The NGX Banking, NGX Insurance, NGX Consumer Goods, NGX Oil & Gas and the NGX Industrial indices plummeted by 1.60 per cent, 0.47 per cent, 1.41 per cent, 3.63 per cent and 0.10 per cent to close at 391.61 points, 176.79 points, 560.85 points, 368.03 points and 2,194.36 points respectively.

The market breadth for the week was positive as 15 equities appreciated in price, 49 equities depreciated in price, while 92 equities remained unchanged. Vitafoam Nigeria led the gainers table by 17.11 per […]

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