The gloomy feeling on the Nigerian Exchange, NGX, remained last week amid profit taking, lowering the stock market’s Year to Date, YtD growth to 28.4% from 29.9% the previous week. Profit taking across sectors caused the benchmark NGX All-Share Index, ASI, to close lower at 95,973.45 points from 97,100.31 points, continuing the bear trend for two weeks in a row.
As a result, month-to-date returns have stabilised at -1.8%. Similarly, the market capitalisation fell by more over N2 billion, closing at N55.129 trillion from N55.131 trillion the previous week.
Analysts noted that the market’s mixed momentum and sentiment reflect in the market’s volatility dynamics, which creates the necessary opportunity to buy low and sell high, especially as most of the listed companies have become undervalued as a result of the recent downtrend in their share prices, even as the pullbacks are driven by high cap stocks that are facing selloffs due to sector rotations and portfolio rebalancing. Corporate figures reflect many companies’ positions on the Exchange, despite continued economic challenges as revealed by data.
The market analysis revealed that the Oil and Gas Index increased by 3.5%, the Banking Index by 0.4%, and the Insurance Index by 1.9%, while the Industrial Goods Index fell by 4.9% and the Consumer Goods Index by 1.4%.
Analysts have remarked that the government’s economic changes, as judged by the outpouring of fiscal and monetary policies, have yet to set the nation’s economy on a path of recovery, owing to the ongoing mismatch between these and earlier ones.
There are also concerns with the implementation approach amid the fluctuating oil production output, even as the Naira continues to weaken at a time when oil is recovering to sell below $80 per barrel on the international market.
Regency Alliance Insurance notified the Exchange of its board meeting last week, while Oando announced the conclusion of its $783 million acquisition of ENI’s Nigerian Agip oil company.
Airtel Africa continues to update the Exchange on its ongoing share repurchase programme, just as Jaiz Bank informed the market of the appointment of a non-executive director, and MTNN, Cutix, and Ucap alerted the Exchange of insider trading in their shares.
Regarding the market forecast, investors at Invest Data Consulting stated: “We expect mixed sentiment to continue on bargain hunting, profit taking, and sector rotation in an oversold region.” Portfolio shifting is still occurring, as investors take advantage of pullbacks to buy into value.
