Analysts predict cautious stock trading this week

Analysts have predicted there will be cautious trading in the domestic stock market this week as the bargain hunt continues, ahead of the mid-second-half dividend season.

They also predicted the flow of funds to the fixed income segment based on the rate hike by the Central Bank of Nigeria (CBN), as sector rotation persists and players digest macro data and headlines. fourth quarter (Q4) unaudited results released to date. .

Analysts are also on the lookout for an inflation rate of 17.71% to support the recovery in the new month amid swinging oil prices. Additionally, the market continues to interpret rising inflation against the price of crude oil and other factors amid profit taking and portfolio rebalancing. This will cause market participants to target fundamentally sound, dividend-paying stocks in hopes of dividend announcements.

Analyst Comments

In the coming week, analysts at Cordros Securities Limited said: “With the first-half 2022 earnings season on the horizon, we believe investors will be looking for clues about the sustainability of decent corporate earnings releases for the first quarter 2022.

“However, we expect mixed market performance over the coming week as bargain hunting on stocks offering attractive dividend yields will be accompanied by intermittent profit-taking activity. investors to only take positions in stocks that are fundamentally justified, as the unimpressive macro story remains a significant headwind for corporate earnings.

Additionally, GTI Securities Limited said, “The domestic market closed slightly positive despite the mixed sentiment seen last week. We expect cautious trading to continue over the coming week. »

Cowry Assets Management Limited said: “In the new week, we expect to see expectations for Q2 numbers act as a catalyst to trigger more bullish sentiment. Additionally, we continue to maintain positive sentiment in the market as investors are urged to trade stocks of companies with good fundamentals and a positive outlook to avoid falling into the bearish trap.

Business activities last week

Last week saw a hard-fought battle between bulls and bears as mixed feelings dominated trading activity on the national exchange.

Eventually, the All-Share Index posted a 0.24% week-over-week (WoW) gain to close at 51,829.67 points. Similarly, WoW market capitalization increased by 67 billion naira to close at 27.942 billion naira.

Notably, equity investments in Okomu Oil Palm, FBN Holdings (FBNH), Ecobank Transnational Incorporated (ETI) and International Breweries supported market performance.

Sector performance was mixed, with the insurance and banking indices gaining 3.6% and 1.1% respectively. On the other hand, the NGX consumer goods index and the NGX industrial index fell by 0.40% and 0.13% in weekly comparison.

Market breadth for the week was positive as 34 stocks appreciated, 29 stocks depreciated, while 93 stocks remained unchanged. John Holt led the winners chart by 30.16% to close at 82 kobo per share. Cornerstone Insurance followed with a gain of 20.97% to close at 75 kobo, while Okomu Oil Palm rose 12.09% to close at N216.90 per share.

On the other side, PZ Cussons Nigeria led the decliner chart by 18.40% to close at N10.20, per share. University Press followed with a loss of 10.42% to close at N2.58, while Prestige Assurance fell 10% to close at 36 kobo, per share.

Overall, a total turnover of 1.348 billion shares worth N24.487 billion in 22,155 transactions was traded last week by investors on the Stock Exchange floor, in contrast to a total of 1.121 billion shares worth N13.703 billion that traded hands in the previous week. in 22,350 transactions.

The financial services sector (measured by volume) topped the business chart with 1.009 billion shares valued at N6.796 billion traded in 11,352 deals; contributing 74.87% and 27.75% respectively to the volume and value of the total stock turnover. The conglomerate industry followed with 79,616 million shares worth N144.549 million in 689 deals, while the oil and gas industry traded a turnover of 72.996 million shares of worth N1.862 billion in 1,799 transactions.

Negotiation of the three main actions; Mutual Benefits Assurance, Living Trust Mortgage Bank and Guaranty Trust Holding Company (GTCO) accounted for 484.839 million shares worth N2.414 billion in 2,410 deals, contributing 35.97% and 9.86% respectively to the volume and the value of the total turnover of the shares.

TIP 0.44 10.00

Cutix 2.47 9.78

LinkAssure 0.57 9.62

John Holt 0.82 9.33

Cave 1.11 8.82

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