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Stock Market To Close Positive Ahead Of Christmas Holidays

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Ahead of the Santa Claus and year-end rally, analysts expect that the Nigerian stock market will close positive this week.

Analysts’ Optimism

Analysts at Afrinvest Limited stated that, “this trading week, we expect the market to extend last week’s positive performance, driven by bargain purchase as investors continue to review their portfolio for the next year.”

In the new week, analysts at Cowry Assets Management Limited expected the local stock market to be bullish ahead of the usual Santa Claus rally and corporate actions.

Also, Cordros Securities Limited expects market performance to be dominated by the bulls in the week ahead, as positioning by early birds in dividend-paying stocks ahead of 2021 full year dividend declarations should outweigh profit-taking activities.

“Notwithstanding, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings,” it stated.

The chief operating officer of InvestData Consulting Limited, Ambrose Omordion said: “we expect the low liquidity and changing investment decision to keep the trend on this direction ahead of Santa Claus week as market players digest November consumer price index and happenings in fixed income market after the Nigerian Exchange (NGX) index action pulled back to trade above its 50-Day Moving Average on a low sell volume in the face of assets rebalancing and seasonality likely to influence stock prices ahead of year-end window dressing.”

He pointed out that, “the relatively low volume traded in the midst of retracement is creating new buy opportunities on the strength of the third quarter (Q3) numbers. Also, candlestick formation and volume traded during the session revealed that institutional players are not buying yet.  It is equally noteworthy that during a ranging market many players seat on the fence waiting for a breakout or down before jumping into any position.  Even as many stocks are trading within their buy ranges, a situation expected to attract more funds into the stock market, given the dividend yield capable of serving as a hedge against inflation.”

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Last Week’s Trading Activities

The domestic stock market closed northward amid renewed investor interest last week.  Amid bargain hunting activity on the domestic bourse, the All-Share Index rose week-on-week (W-o-W) by 470.34 basis points or 1.12 per cent to close at 42,353.31 points. Similarly, market capitalisation rose by N253 billion W-o-W to close at N21.107 trillion.

Also, most of the sub-indices tracked closed in green. The NGX Insurance, NGX Consumer Goods and the NGX Industrial indices gained 0.04 per cent, 0.63 per cent and 0.38 per cent to close at 190.93 points, 550.41 points and 2,081.14 points respectively. However, the NGX Banking and the NGX Oil & Gas indices fell by 1.82 per cent and 0.57 per cent to close at 395.38 points and 350.65 points respectively.

The market breadth for the week was positive as 32 equities appreciated in price, 28 equities depreciated in price, while 96 equities remained unchanged. Meyer Plc led the gainers table by 27.27 per cent to close at 42 kobo, per share. ROYAL Exchange followed with a gain of 15.00 per cent to close at 69 kobo, while FTN Cocoa Processors went up by 13.51 per cent to close to 42 kobo, per share.

On the other side, Champion Breweries led the decliners table by 13.65 per cent to close at N2.34, per share. UPDC followed with a loss of 10.17 per cent to close at N1.06, while e-Tranzact International declined by 9.57 per cent to close at N1.89, per share.

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Overall, a total turnover of 1.317 billion shares worth N15.330 billion in 18,292 deals were traded last week by investors on the floor of the Exchange, in contrast to a total of 2.630 billion shares valued at N26.900 billion that exchanged hands previous week in 20,848 deals.

The Financial Services Industry (measured by volume) led the activity chart with 899.768 million shares valued at N7.325 billion traded in 9,326 deals; contributing 68.32 per cent and 47.78 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 209.502 million shares worth N2.796 billion in 2,866 deals, while the Conglomerates Industry traded a turnover of 93.813 million shares worth N663.135 million in 485 deals.

Trading in the top three equities; FBN Holdings (FBNH), International Breweries and Access Bank (measured by volume) accounted for 469.879 million shares worth N4.170 billion in 1,958 deals, contributing 35.68 per cent and 27.20 per cent to the total equity turnover volume and value respectively.

 

 

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