By Peter Egwuatu
Mixed sentiments trailed the Nigerian stock market last week amid portfolio reshuffling with the major market indicators closing lower.
This is the third consecutive week that the market is closing lower due to selloffs of shares in both mid and highly capitalized companies across the sectors.
Analysts have emphasised that there had been an increase in the number of companies notifying the market of their board meetings as directors meet to approve the audited financial statement for 2024 and declare dividend for shareholders.
They noted that this development is expected to impact the market positively if these numbers beat expectations in reward and performance.
Meanwhile, analysis of trading last week, showed that the selloffs in MTN Nigeria led to the drop in its price by -4.2%, Oando -7.1% and UBA -3.6%, prompting the All-Share Index (ASI) to fall by 0.5% Week on Week, W/W to close at 105,955.13 bases points from 105,538.60 bases points the previous week.
Another major market indicator, market capitalisation declined by over N366 billion to close at N66.351 trillion from N66.717 trillion the previous week.
Consequently, the Month-to-Date MtD , and Year-to-Date, YtD returns moderated to -1.7% and 2.9%, respectively. However, trading activity was robust, as the total volume and value increased by 81.6% W/W and 34.9% W/W, respectively. Meanwhile, sectoral performance was mixed, as the Oil & Gas Index declined by -1.2%, Banking Index -0.4%, and Industrial Goods Index -0.2% .The Insurance Index up 0.9% advanced, while the Consumer Goods Index remained unchanged.
Commenting on market outlook, analysts at Cordros Research stated: “ Looking ahead, we expect market sentiment to be shaped by investors’ reactions to the February inflation report expected next week, and direction of yields in the fixed income market. However, we do not rule out potential bargain-hunting in some banking names, as recent selloffs suggest attractive re-entry opportunities.”
Commenting as well, analysts at InvestData Consulting stated: “We expect mixed sentiments to continue on profit taking, portfolio reshuffling and bargain hunting and digesting of corporate action/ Q1 earnings forecast, as more earnings are expected to hit the market with dividend announcement. Also, sector rotation and portfolio rebalancing continued in the market with investors taking advantage of price correction to buy into value.
This is amid the volatility and pullbacks that add more strength to upside potential. Consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.
The ongoing volatility due to global trade warfare will definitely make some economies across the globe and mar some others. It is therefore time for economic managers and government to rethink their fiscal and monetary policies if they are to drive and sustain growth in their domain, even as the recent selloffs are creating opportunities to buy in value and rebalance portfolios”.
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