Nigeria’s equities market opened the new month on a slightly note, decreasing by 0.04percent at the close of trading on Monday July 1. Investors lost about N21billion at the close of trading.
“This week, we expect cautious optimism in the equities market, fuelled by renewed investors’ confidence in the market. We anticipate heightened market activity this week as investors and portfolio managers reassess their positions for the second half of the year.
“This is likely to result in profit-taking on stocks that have seen significant gains, while others may look to average down their losses by buying positions in stocks that have underperformed,” said Meristem research analysts in their July 1 note to investors.
According to them, investors may continue to react to corporate actions in the banking sector, which may drive buying interest during the week.
“Overall, we expect the local bourse to close in the green zone this week,” the analysts added.
The Nigerian Exchange Limited (NGX) All Share Index (ASI) and Market Capitalisation decreased from preceding trading day’s highs of 100,057.49 points and N56.601trillion respectively to 100,020.83 points and N56.580trillion.
Equities market’s year-to-date (YtD) return stood lower at 33.76percent. In 10,112 deals, investors exchanged 274,682,596 shares worth N3.712billion.
“Looking ahead, the equities market would be mixed as investors explore opportunistic investment strategy. Thus, we anticipate cherry picking of fundamentally sound stocks to persist in the week ahead.
“Similarly, market activities will increase due to ongoing banks recapitalisation, second quarter (Q2) filing, and envisaged corporate actions in the weeks ahead,” according to United Capital research analysts.
They expect that elevated interest rates in the fixed income market will continue to negatively impact the equities market this week “as investors continue to take advantage of high interest rates in the fixed income space”.
“Overall, fund managers and investors should continue to adopt an opportunistic investment strategy to take advantage of opportunities the market presents at each given time,” the analysts further said.
