The bears are seemingly not willing to relinquish their position at the Nigerian stock market.
After pre-protest sell pressure, many investors still retain their cautious stance on the market, leading to another negative start to this new week.
In the trading week ended August 2, the market recorded total turnover of 3.393 billion shares worth N52.304 billion in 44,814 deals in contrast to a total of 3.557 billion shares valued at N47.220 billion that exchanged hands the preceding week in 42,871 deals.
As businesses gradually open while Nigeria’s protest eases, more stock investors look to identify attractive entry points and potential interim dividend returns as earnings releases dictate pace of the market.
Read also: Foreign investors move N267.5bn from Nigeria stock market in 5 months
Here are what analysts expect
“We anticipate that there will be pockets of buy-side interest across the market as the next batch of earnings comes in,” Vetiva research analysts said last Friday.
According to United Capital research analysts, the equities market is expected to show mixed performance as investors adopt opportunistic investment strategies.
They said, “We foresee selective buying of fundamentally strong stocks continuing into the upcoming week. Market activity is anticipated to remain elevated due to ongoing banks’ recapitalisation efforts, Q2 filings, and corporate actions in the near term”.
Also, United Capital analysts noted further that elevated interest rates in the fixed income market will likely exert a negative pressure on the equities market as investors capitalise on higher fixed income yields. “Overall, fund managers and investors are advised to maintain an opportunistic approach to capitalise on prevailing market opportunities,” they said.
Also in their view, research analysts at Meristem said, “This week, we expect the local bourse to trade sideways but tilting towards the negative, particularly for the banking sector. This decision is influenced by the recent windfall tax announcement and underwhelming earnings reports from the consumer goods sector”.
“However, we anticipate some positive movement driven by potential capital raise announcements from banks like FCMB and Zenith Bank, which could spark investor interest and market activity. Additionally, investors are expected to position themselves ahead of upcoming dividend payments, potentially providing some support to the market. On a balance of factor, we expect the equities market to close in the negative zone this week,” according to Meristem analysts.
Futureview research analysts said, “We expect a mixed market close, driven by cautious trading in equities supported by positive corporate actions. Additionally, investors’ attention is expected to shift towards the Nigerian Treasury Bills Primary Market Auction (PMA), which may dampen market sentiment”.
