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Analysts see positive momentum continuing at Nigerian Bourse as market opens

Transcorp Hotels, MTNN, FBNH, Oando, others push market to new low

Taking a cue from the positive seen last week, the Nigeria stock market stands to record similar trend this week, according to analysts in their recent comments.

As at 11am on Monday, March 18, the market was trading in the green zone with its benchmark index at 105,173.88 points indicating an increase by 0.08percent.

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Nigeria’s equities market rose by 3.71percent or N2.12trillion in the trading week ended Friday, March 5, powered by investors who bought largely capitalised stocks. This was in addition to rally seen across banking and insurance stocks despite mild selloff in oil & gas counters.

“We expect the positive momentum in the Nigerian equities market to continue this week. This expectation is premised on the upbeat mood in the local bourse as investors seek capital gains and attractive dividend yield opportunities across fundamentally sound tickers (especially on banking stocks),” according to Meristem analysts in their March 18 note.

They expect a muted impact from fixed income activities this week, adding that “however, a potential rate hike from the Monetary Policy Committee (MPC) in its meeting next week poses a threat to the positive outlook of the equities market. “Notwithstanding, we expect the NGXASI to close in the green zone this week”.

The market closed last week with year-to-date (YtD) return at 40.54percent, while month-to-date (MtD) it was up by 5.11 percent.

The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and equities market capitalisation also increased week-on-week (WoW) from preceding week’s lows of 101,330.85 points and N57.293 trillion respectively to 105,085.25 points and N59.416trillion.

“Despite the tilt towards the fixed income space last week, as volumes in the equity market dropped, the banking sector had an impressive week, returning 12.84percent week-to-date (WtD), while the ASI gained 3.71percent.

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“This can be attributed to investors taking positions ahead of earnings and anticipated corporate disclosure. While rates are expected to remain slightly elevated, we still expect long-term investors to continue to take advantage of some of the decent entry levels in the equity market this week,” said Vetiva Research analysts in their March 18 note.