Mixed feelings trail Nigerian equities performance

Analysts have expressed varied views on the direction of Nigerian equities market this week. Their views come on the heels of last week’s dismal outing at the local bourse after the Nigerian stock index depressed further due to negative sentiments as sell pressure permeated the market.

While some analysts see investor sentiments tilting towards positioning for dividend income, others highlight that the persistent negative sentiment in the consumer goods sector could further weigh on the NSE ASI performance in the session ahead.

Amid record exodus of foreign equity buyers at the Nigerian Stock Exchange (NSE), other schools of thought within the stock market foresee domestic equities losing more ground as investors continue to weigh the impact of further economic challenges.

In further show that overall market appetite remains low, this week’s stock trading on the local bourse opened on a negative note as overall offer position outweighed bid position.

“We expect sentiment to remain mixed, albeit with a bearish bias. However, the persistence of the broader index in the oversold
region provides an attractive entry opportunity”, said research analysts at United Capital Plc. The bears framed proceedings for the most part of trading week to February 10 on the back of scarcity of bullish triggers.

As a result, the NSE All-Share Index and Market Capitalisation depreciated by 1.79 percent and 1.38 percent to close the review week at 25,340.02 points and N8.770trillion respectively from 25,802.54 points and N8.892 trillion at the beginning of trading last week.

Market report shows nineteen (19) equities appreciated in price, lower than twenty-three (23) equities in the preceding week.
Thirty-eight (38) equities depreciated in price, higher than thirty-seven (37) equities in the preceding week, while one hundred and nineteen (119) equities remained unchanged higher than one hundred and fifteen (115) equities recorded in the preceding week.

Research analysts at Lagos-based

SCM Capital Limited in their outlook for the week expected the market to resume upbeat this week “as sentiments tilts towards positioning for dividend income.”

“The reflection of very strong flows of volume in the financial counters last week supports our view. Besides, the market is currently trading in an oversold region, depicting a buyer’s opportunities for medium to long-term,” SCM Capital analysts said.

Also in recognition that the equity market traded bearish last week as weak investor appetite spurred selloffs across board, equity research analysts at Vetiva Capital Management Limited said in their Monday breakfast report that, “whilst the green closes across most key sectors coupled with the big turnaround in market breadth at last week’s close signal some improvement in overall market sentiment, we highlight that investor appeal for consumer goods stocks in particular remain weak. We believe this could further cap gains in coming sessions.”