Mixed trade, sentiment may linger in stock market this week

TThe recent seesaw movement in the Nigerian stock market, revealed by sentiment uptrends and downtrends, may continue in the market this week.

Analysts noted that the lingering mixed feelings are due to heavy selling, withdrawals and bargain hunters taking advantage of relatively low prices of blue-chip stocks and companies relative to value. This is especially true for those who suffered losses amid the high numbers posted by these companies, revealing their undervalued state, as evidenced by the high dividend yields indicating the possibility of a higher payout as a hedge against the downturn. surge in inflation.

Analyst Optimism

Chief Operating Officer of InvestData Consulting Limited, Mr Ambrose Omordion, said: “We expect the trends and mixed feelings to continue on the bargain hunt as players react to the impressive half-year results. looking forward to more corporate scorecards, especially from first-tier banks amid sovereign risks, as all eyes are on interim dividends.

“We also note the flow of funds into the fixed income segment during the rate hike by the CBN, as sector rotation persists. Analysts are also focused on monitoring second-quarter GDP and fund flows amid swinging oil prices. »

He added that “the market also continues to interpret rising inflation relative to the price of crude oil and other factors, amid profit taking and portfolio rebalancing. This will encourage market participants to target fundamentally sound, dividend-paying stocks in the hope of dividend announcements.

At the start of the new week, analysts at Cowry Assets Management Limited expected the market to trade with mixed sentiment as investors position themselves to rebalance their portfolios while continuing to show minimal apathy towards risky assets like stocks, stating “however, we continue to advise investors to trade”. on the shares of companies with solid fundamentals and a positive outlook.

Cordros Securities Limited said: “In the coming week, we believe investors will focus on the outcome of the bond auction scheduled for Monday (August 15, 2022) to gain more clarity on the movement of yields in the fixed income (FI) market.

“As a result, we are looking at cautious buy action from investors looking for dividend yields amid intermittent profit-taking activity. fundamentally sound, as the lackluster macro environment remains a significant headwind for corporate earnings.

Business activities last week

The bears dictated the proceedings on the national stock exchange, as profit-taking activity dominated market performance, with the benchmark registering declines in four of five trading sessions last week.

Specifically, the All-Share Index fell 2.09% week-over-week (WoW) to close at 49,664.07 points. Similarly, market capitalization fell by 571 billion naira to close at 26.787 billion naira.

Notably, the sell-off in shares of MTN Nigeria Communications (MTNN), BUA Cement, Dangote Cement and Stanbic IBTC Holdings led to the weekly loss.

Analyzing by sectors, the industrial goods index fell by 5.2% WoW. The banking index posted a weekly loss of 0.9%, while the Oil & Gas index lost 0.4% WoW. On the other side, insurance posted a weekly gain of 6.0% and the consumer goods index rose 3.0% WoW.

Market breadth for the week was positive as 33 stocks appreciated, 26 stocks depreciated, while 97 stocks remained unchanged. Ikeja Hotel led the winners chart by 30.93% to close at N1.27, per share. Multiverse Mining and Exploration followed with a gain of 29.79% to close at N2.44, while NEM Insurance rose 29.71% to close in on N4.41 per share.

On the other side, Cutix led the decliner chart by 14.58% to close at N2.05, per share. Caverton Offshore Support Group followed with a loss of 10.26% to close at N1.05, while BUA Cement was down 9.95% to close at N52.95, per share.

Overall, a total turnover of 1.511 billion shares worth N13.547 billion in 20,074 trades was traded last week by investors on the Stock Exchange floor, in contrast to a total of 705.636 million shares worth N12.850 billion traded in the previous week. in 22,124 transactions.

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