Stocks market remains volatile
The Nigerian stock market remains highly volatile in the interim and its supportive fundamentals may not be strong enough to support rally this week as the realities of COVID-19 remain prevalent.
More Nigerians are dying from Coronavirus, new cases increasing and recoveries dropping. Investors will continue to price-in this risk to the economy and businesses.
“We continue to advise investors to trade cautiously and seek trading opportunities in only fundamentally justified stocks”, said equity research analysts at Cordros Capital.
“In our opinion, risks remain on the horizon due to a combination of the increasing number of COVID-19 cases in Nigeria and weak economic conditions,” the analysts said.
Investors had booked N186billion loss in the trading week ended June 19. The Index posted negative returns in four of the five trading sessions.
Amid these new lows, some investors going to the market this week may decide to increase bargains on the back of cheap valuations of a number of fundamentally sound stocks.
“With the consistent declines recorded in the review trading week, analysts at Lagos-based Vetiva Securities said they anticipate a rebound in the new week “on the back of cheap valuations of a number of fundamentally sound stocks, in the absence of any external shock that can again weaken investors’ confidence”.
The Nigerian Stock Exchange (NSE) All Share Index (ASI) decreased by -0.43 percent last Friday.
“We expect the market to witness the same sentiment in the next session,” according to FBNQUEST research analysts.
Last trading week, the stock market dipped by -1.41percent. Fourteen (14) equities appreciated in price last week, lower than 34 equities in the preceding week.
Forty-seven (47) equities depreciated in price, higher than 31 equities in the preceding week, while 102 equities remained unchanged, lower than 98 equities recorded in the preceding trading week.
Month-to-date (MtD), it has decreased by -1.75 percent. The market’s negative return year-to-date (YtD) stood higher at 7.51percent.
The market was last week largely dominated by the bears, as a number of mid/large-cap stocks closed the week lower.
The NSE ASI decreased to 24,826.75 points while the value of listed stocks decreased to N12.951trillion as against week open high of
25,182.67 points and N13.137 trillion respectively. Dangote Cement Plc recorded the highest decline on Friday after its share decreased from
N139 to N130, losing N9 or 6.47percent. In 3,695 deals, investors exchanged 174,676,912 units valued at N2.010billion