Nigeria stock markets roared stronger on Monday by 0.62 percent as investors started the new trading week with eyes on third quarter (Q3) earnings season despite concerns about inflation figure.
Analysts see higher petrol prices pushing Nigeria’s inflation rate for the month of September higher ahead of the National Bureau of Statistics (NBS)’s report.
“Looking ahead, we expect mixed sentiments to persist in the equities market. As a result of the stubborn nature of inflation (particularly fuelled by elevated exchange rate environment), the MPC hiked 50bps,” according to Lagos-based United Capital research analysts.
Cutix, Zenith Bank, Chams, UBA and newly listed Aradel Holdings were actively traded stocks on the Nigerian Exchange Limited.
Stocks like Mecure and Nascon pushed the market higher at the beginning of this week’s trading. Mecure increased from N10.10 to N11, adding 90 kobo or 8.91 percent, while Nascon increased from N30 to N32, adding N2 or 6.67percent.
The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and equities and Market Capitalisation which opened the new week at 97,606.63 points and N56.088 trillion respectively rose to 98,207.81 points and 98,215.13 points and N59.509 trillion.
Read also: Stock market dips by 0.10% amid dearth of buy-side drivers
In 8,083 deals, investors exchanged 304,970,417 shares worth N19.707 billion.
“We expect this hike to play a background role in the market, with investors and equity-biased fund managers adopting a more cautious approach to trading.
“This approach involves a strict restriction of trading activities to only equities with solid fundamentals who are set for sustained profitability (bottom-line performance) in FY-2024 financials (beginning from 9M-2024 financials).
“In the same vein, corporates with pending corporate actions will continue to outperform (in terms of positive market sentiments), presenting trading opportunities (in-and-out scenarios).
“Fund managers/traders may consider improving cash positions, to trade market volatilities (while retaining a holistic mid-long term investment posture). Ultimately, investors may retain an investment posture of ≥3 months.
“This will enable portfolios to take advantage of positive sentiments during 9M-2024 earning season, as well as remain positioned to profit from the anticipated (cyclical) portfolio rebalancing activities, which would commence toward the end of the year in Q4-2024,” United Capital research analysts further noted in their recent note to investors ahead of this week’s trading.
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