Nigerian equities market to express cautiously positive outlook, say analysts
A group of analysts have revealed that the Nigerian equities market is expected to sustain a cautiously positive outlook this week, supported by renewed buying interest in selected large-cap stocks and improved trading activity.
In the coming week, Cowry Assets Management Limited said, “we expect the equities market to sustain a cautiously positive outlook this week, supported by renewed buying interest in selected large-cap stocks and improved trading activity. However, the negative market breadth and persistent weakness across key sectors suggest underlying investor caution, which could trigger intermittent profit-taking.
“Consequently, market performance is likely to remain selective, with investors focusing on fundamentally sound stocks and opportunities for capital appreciation.”
Looking ahead, Cordros Securities Limited noted “we expect cautious trading as investors digest the earnings releases and corporate disclosures, including dividend declarations, driving stock-specific activity and selective repositioning across counters.”
Meanwhile, the domestic bourse closed last week on a positive note, as increased bargain hunting in Dangote Cement, Access Holdings, MTN Nigeria Communications (MTNN), United Bank for Africa (UBA) and Aradel Holdings drove the All-Share Index higher by 2.86 per cent week-on-week (WoW) to close at 254,299.49 points, while market capitalisation increased by N4.60 trillion to N165.51 trillion.
Consequently, the market’s year-to-date (YTD) return improved to 63.42 per cent, extending its positive performance and reinforcing the strong gains recorded since the beginning of the year.
Despite the positive market performance, investor sentiment remained somewhat subdued, as market breadth closed negative with 33 gainers against 48 decliners. This indicates that the benchmark’s advance was not broad-based, with gains concentrated in selected stocks while a larger number of equities recorded losses.
The divergence between the ASI’s performance and market breadth suggests that appreciation in a few heavyweight counters played a significant role in lifting the overall index.
