Market momentum remains positive on likely portfolio rebalancing

CardinalStone research analysts said that equities market momentum has remained positive into year-end, “supported by likely portfolio rebalancing as fund managers reposition ahead of the new year”.

In their recent Model Equity Portfolio (MEP), they noted that “consistent with our strategy from last week, we have further increased our overweight exposure in Dangote Cement and Zenith Bank, while upgrading UBA to an overweight position (previously market weight)”.

“We continue to monitor the market for attractive entry points in fundamentally strong names to further strengthen our position. We will make incremental adjustments as needed to keep the portfolio optimised through the close of the year,” the analysts said.

“Last week, the exchange maintained its bullish momentum for the second consecutive week, with the benchmark index gaining 1.63 percent week-on-week (WoW) to settle at 149,433.25 points.

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“The Model Equity Portfolio (MEP) gained 2.13 percent in comparison, outperforming by 50 basis points (bps). Year-to-date (YtD), the MEP return of 48.87 percent maintains its lead over the All-Share Index (ASI’s) 45.18percent, outperforming by 3.69 percent,” the analysts further stated.

According to them, the MEP’s outperformance last week was “driven largely by our overweight position in MTNN (+12.98 percent WoW), which contributed 176 bps to overall portfolio performance.

“Additional support came from strong price action in Zenith Bank (+2.89 percent WoW), International Breweries (+5.29 percent WoW), and Guinness (+10 percent WoW), where we also hold overweight positions,” they added.

Iheanyi Nwachukwu

Iheanyi Nwachukwu, is a creative content writer with almost two decades journalism experience writing on banking, finance, capital markets, and tax. The multiple awards winning journalist is Assistant Editor, BusinessDay. Iheanyi holds BSc Degree in Economics from Imo State University; Master of Science (MSc) Degree in Management from University of Lagos. Iheanyi has attended several work-related trainings including (i) Advanced Writing and Reporting Skills (Pan African University, Lagos); (ii) News Agency Journalism (Indian Institute of Mass Communication {IIMC}, New Delhi, India); and (iii) Capital Markets Development and Regulations (International Law Institute {ILI} of Georgetown University, Washington DC, USA). Other trainings Iheanyi attended include: Economic/Political Risk Analysis (By Thomson Reuters Foundation); International Financial Journalism (IFJ) (By PMA Media Training, UK); Effective Business Writing Skills (By Phillips Consulting); Reporting on Corporate Governance (By International Finance Corporation (IFC) & Thomson Reuters Foundation UK); etc. In addition, he has participated in high-level economy & markets events in Dubai, South Africa, Morocco, and other African countries like Zambia, Ghana and Gambia.