Equities market opens week on negative note

Nigeria’s equities market opened this week on a negative note, decreasing by 0.15percent or N57billion at the close of trading on Monday November 20 as investors cashed out some gains in some stocks that had rallied since the time of purchase.

Investors sold for profit, stocks like Stanbic IBTC Holdings, CWG, and Caverton Offshore Support Group. Stanbic IBTC Holdings share price decreased from N69.95 to N65, losing N4.95 or 7.08percent. CWG dropped from N7.95 to N7.70, losing 25kobo or 3.14percent, while Caverton was down from N1.44 to N1.40, down by 4kobo or 2.78percent.

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Lagos-based United Capital research analyst had ahead of trading expected the bullish sentiments in the local equities market to continue, hinging their optimism on movements in large-cap stocks, “as investors remain positively biased to fundamentally sound stocks.”

“The market has shown resilience and maintained its upward trajectory despite the rising yield in the fixed-income environment. However, a downside risk to our projection is that there may be pockets of profit-taking activities as some investors look to crystallise gains,” they also noted.

The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and its market capitalisation decreased from week-open highs of 71,112.99 points and N39.107trillion respectively to 71,008.7 points and N39.050trillion. This year’s return has decreased to 38.55percent.

“For this week, we expect a couple of factors to impact investors’ sentiment. Specifically, we anticipate a downturn in market momentum, driven by concerns around the inconsistency of the Monetary Policy Committee (MPC) (as it further postponed its next meeting scheduled to hold during the week).

“Also, we foresee profit taking activities across tickers that have realized significant gains. We, however, do not rule out the possibility of bargain hunting activities during the week as investors strategically take positions on stocks with attractive entry points.

“Overall, we expect the market to trade on a mixed note with a prevailing bearish sentiment. Thus, we expect the NGX-ASI to close in the red zone this week,” Meristem research analysts said in their stock recommendation for November 20.

In 6,551 deals, investors exchanged 358,445,972 shares valued at N4.357billion. Access Corporation, AIICO, Universal Insurance, Japaul Gold and Veritas Kapital Assurance were actively traded stocks.

“We still expect similar tepid trading sessions this week, as investors look to other asset classes, given the significant returns most of the counters have posted this year,” Vetiva research analysts said in their recent note.

“As we approach the end of the year, we will begin raising our positions in banking names as we look to re-balance our portfolio in December,” said CardinalStone research model equity portfolio.

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“This week, we will continue to actively monitor our positions in MTNN, Seplat and BUA Cement and take advantage of opportunities as we deem fit,” they noted.

CardinalStone said that given BUACement recent trajectory, they see legroom for the stock, and “we will continue to monitor the ticker to find attractive entry points to ride the recovery wave”.