Investors in Nigeria’s equities market booked about N464billion loss on Monday as the market recorded its first decline this week.
Investors continued to take profit from stocks like NASCON and Dangote Sugar Refinery that had rallied due to their merger plans.
The stock market dropped by 1.24percent at the close of trading on Monday as investors on the Nigerian Bourse in 9,914 deals exchanged 520,133,186 shares valued at N8.334billion.
The stock market’s key performance indicators – Nigerian Exchange Limited (NGX) All-Share Index (ASI) and equities market capitalisation decreased from preceding day’s 68,143.34 points and N37.295trillion respectively to 67,296.18 points and N36.831trillion.
NASCON dropped from N58 to N52.20, down by 10percent, while Dangote Sugar Refinery dipped from N64.15 to N57.75, losing 10percent. Etranzact was also down, from N10 to N9, losing 10percent, while Learn Africa lost 9.9percent of its day-open value after moving from N3.65 to N3.29.
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The market’s return year-to-date (YtD) stood lower at +31.31percent.
“We foresee investors sentiment tilted more toward listed corporates with strong and pending corporate actions,” said Lagos-based analysts at United Capital.
According to them, “investors will look to take positions across listed Tier 1 banks that are yet to release their half year (H1) 2023 financials. Overall, we expect a group of investors to remain tilted toward the money market, in a bid to take advantage of the elevated interest rate.
“This will be translated into pockets of bearish sentiments. However, fund managers and risk inclined investors may continue cherry-picking stocks with strong fundamentals and improved dividend yield”.
According to Futureview research analysts in their September 11 note, “We anticipate bullish sentiment trading as banks announce high PAT in H1 results. We advise investors to invest in high-quality stocks with strong fundamentals supporting them”.
Also in their recent note, Meristem analysts said, “In our view, the positive momentum in the Nigerian equities market will be sustained this week as investors continue to seek bargain hunting opportunities in the market.
“In addition, we underpin that the recent developments by the current administration to build bilateral trade relationships with foreign bodies could prompt investors to take long position on tickers in the local bourse.
“Also, further earnings releases and dividend declarations from the tier-1 banks are poised to drive buying activities in the banking sector this week”.
The Meristem analysts further said, “the tepid system liquidity ahead of the Bonds and T-bills auction this week is likely to cause a flow of funds from the equities market and withhold inflow of new funds. Also, we note that prices are trading beyond fundamentally justifiable levels, which could spur occasional profit taking. Ultimately, we expect the Nigerian equities market to close up this week”.
