… As sell pressure pushes prices down
By Peter Egwuatu
Sell pressures on blue chip stocks such as Oando, First Holdco and others has pushed down the Nigeria Exchange Limited, NGX All Share Index, ASI, by 0.1% to close last Friday at 105,511.89 points from 105,426.12 bases points the previous week.
Another major indicator, market capitalization, declined by over N8 billion to close at N66.147 trillion from N66.155 trillion the previous week.
But analysts have called for caution this week in view of the global trade war following President Donald Trump’s increase in tariff for exports coming to America as well as the ongoing reform policies by President Bola Tinubu.
Details of trading last week showed that bearish sentiment prevailed as sell pressures on OANDO shares, which declined by -13.1% and First Holdco -7.6% majorly affected NGX ASI.
Consequently, the Year-to-Date, YtD return moderated to 2.5%, reflecting a slight pullback in market momentum.
Also, trading activity was subdued, primarily due to the holiday-shortened trading sessions, with volume and value declining by 84.4% Week on Week, W/W and 92.8% W/W, respectively.
On sectors, performance was broadly negative, as the Insurance Index declined by -4.1%, Oil & Gas Index -1.2%), Consumer Goods Index -0.9% , and Industrial Goods Index -0.2% while the Banking Index went up by 0.2%.
Commenting on market development, analyst at Cordros Research stated: “This week, trading is likely to remain cautious in the absence of major positive catalysts.
Nonetheless, recent dividend declarations and anticipated earnings from banking names, including Access Corporation and First Holdco, may spur bargain purchases.”
Also commenting, analysts at InvestData Consulting said: “We also note the added impact of the global trade warfare in the ongoing volatility and the fact that it 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, so, the sideways movement of the market creates opportunities to buy in value and reshuffle portfolios in the mature markets and in our market today” they added.
On market outlook, the analysts at InvestData said: “We expect mixed sentiment to continue, as players digest earnings reports and target fundamentally sound stocks with strong earnings power and high payout, even as bargain hunting, profit taking and portfolio reshuffling persists. A few more earnings are expected to hit the market with dividend announcement in the coming days, while sector rotation and portfolio rebalancing continue in the market with investors taking advantage of price correction to buy into value”.
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