The buy momentum witnessed last week at the Nigerian stock market may continue this week as investors approach Customs Street with the euphoria of recent consent to 2016 budget.
Without much negative news capable of taming the bulls, many research analysts are optimistic that investors’ upbeat will continue to drive stock indicators higher.
Though, other schools of thought within the stock market foresee a mixture of profit-taking and bargain hunting activities even as confidence levels at the local bourse appears to rise.
While investors raised their wagers at the Nigerian Stock Exchange (NSE) last week, the All Share Index (ASI) appreciated by 2.55percent to close at 25,701.60 points, from 25,062.41 points at the beginning of trading in the review week.
Also, the value of listed equities measured by market capitalization rose to N8.841 trillion from N8.621trillion, gaining about N220billion within four trading days.
“We anticipate that trading activities in this week might sustain the current momentum, given that the much awaited 2016 budget has been signed by the President. We expect investors to key into the counters of companies that are positioned to benefit from the infrastructural and developmental investments of the federal government”, Meristem Securities analysts said.
In their recent breakfast report, analysts at Vetiva Capital Management Limited noted the Nigerian equity market opened last week Tuesday to gains, “posting the best start to a month since April 2015 as investors cheered MSCI’s decision to keep Nigeria in its frontier indexes.”
“Whilst trending lower mid-week, the market rebounded back into the green at week close with broad-based gains across key sectors amidst news of the signing of the 2016 budget. We expect the market to remain upbeat in the coming sessions as investors continue to react to news flow of the signing of the budget”, the analysts added.
“While there is room for stocks to rise in the near term, we believe selling pressure will build as the ASI nears its recent high of 26,000 mark achieved in January,” said research analysts at Lagos-based investment house, Dunn Loren Merrifield.
In their view, market analysts at United Capital plc said, “We think equity performance will be more mixed this week, as investors book profits on some overbought positions.”
“That said, we anticipate euphoria and optimism from the passage of the 2016 budget will stoke some demand and the net effect will likely see the equity market close the week marginally higher,” these analysts added.
Forty (40) equities appreciated in price last week, higher than thirty- three (33) equities of the preceding week. All other Indices finished higher during the review week, with the exception of the NSE Insurance Index, that declined by 0.78%.
Twenty-five (25) equities depreciated in price, lower than thirty- five (35) equities in the preceding week, while one hundred and twenty-four (124) equities remained unchanged higher than one hundred and twenty-one (121) equities in the preceding trading week.
Iheanyi Nwachukwu
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
