Trading activities on the Nigerian Exchange Limited, NGX, ended last week Friday on a negative note as MTN Nigeria, FBN Holdings Plc, Access Corporation among other highly capitalised companies drag down the benchmark All-Share index, ASI, to close lower on the back of profit taking and selloffs as market players cash out their gains from the recent rally.
But analysts said that discerning investors will be positioning ahead of the June consumer price index report, corporate earnings expectations and announcement of ministerial list by the new government.
Similarly, all eyes are on the outcome of this month’s meeting of the Central Bank of Nigeria (CBN) Monetary Policy Committee, even as inflationary pressure has increased significantly with the ongoing economic reforms and unification the exchange rate.
Analysis of the market showed that notably, mid-week sell pressures on MTN Nigeria which lost 3.6%, FBNH 22.1% and Access Corporation 20.3% caused a 0.8% Week-on-Week, w/w decline in the ASI to close at 62,569.73 points from 63,040.41 points the previous week. Based on the preceding, the Month-to-Date, MtD and Year-to-Date, YtD returns went up 2.6% and 22.1%, respectively.
On w/w, market capitalisation closed at N34.069 trillion from N34.436 trillion. Likewise, activity levels were weak, as trading volume and value declined by 46.6% w/w and 56.4% w/w, respectively. Analysing by sectors, the Banking Index declined by 14.3%, Insurance Index 11.5%, and Consumer Goods Index 2.3%, while the Industrial Goods Index gained 9.0% and Oil & Gas Index 1.4% to close in the green.
Reacting on market performance and outlook, analysts at Cordros Research said:” With the half-year earnings season on the horizon, we believe investors will look for clues on the sustainability of the decent corporate earnings released for Q1’23. However, we expect mixed market performance in the week ahead as bargain hunting on dividend-paying stocks will be matched by intermittent profit-taking activities. Overall, we reiterate the need for taking positions in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.”
Similarly, analysts at Investdata Consulting stated:”We expect mixed sentiments on cautious trading and possible positive catalyst in the midst pullbacks and portfolio realignments to support a rebound, as the earnings season has kicked off, supported by more policy pronouncements and the appointments of ministers to offer investment direction.”