Investors hoping to take advantage of low stock prices are likely to boost activities in the stock market this week, according to some capital market analysts.
The equities market has closed on a negative note for the past two weeks with the Nigerian Stock Exchange All-Share Index declining by 0.05 per cent last week and 2.74 per cent the previous week.
Although the year-to-date market return stands at -15.28 per cent, close to the 2014 return of -16.14 per cent, analysts believe that investors seeking to take advantage of low stock prices will help the market open the week on a positive note.
“We expect the bargain hunting activities which permeated the market at the tail end of last week, to creep into the early part of this week,” analysts at Meristem Securities Limited said in their investment guide for this week. “Nevertheless, we advise discerning investors to have long term investment horizon, while also trading with caution.”
Analysts at Vetiva Capital Management expect gains to be driven by interest in the consumer goods and financial sectors.
“We see sustained gains in the next trading sessions on the back of continuing gains in financials, renewed interest in consumer goods and the uptick in market activity,” they said.
In terms of the fixed income market, the Vetiva analysts said, “We anticipate sustained appetite for fixed income securities in the week ahead supported by liquidity. All eyes on the bond auction with N50bn on offer across the five-year and 10-year bonds (re-openings).
“With lower supply and the recent compression in yields, expectations of lower marginal rates should buoy demand for bonds ahead of the auction.”
A turnover of 1.949 billion shares worth N17.336bn had been traded by investors on the floor of the Nigerian Stock Exchange in 15,762 deals last week, as against the 1.358 billion shares valued at N14.722bn that exchanged hands the previous week in 14,772 deals.
Commenting on activities in the stock market last week, analysts at Meristem Securities noted that the market had traded negative in four out of the five trading days of the week. They also observed that volume and value of transactions, respectively advanced by 43.54 per cent and 17.76 per cent week-on-week, just as market breadth (0.57x) tilted in favour of decliners as 25 stocks advanced relative to 44 decliners.
The financial services sector (measured by volume) led the activity chart with 1.714 billion shares valued at N10.770bn traded in 9,378 deals. That accounted for 87.93 per cent and 62.13 per cent of the total equity turnover volume and value, respectively.
It was followed by the conglomerates sector, which had a turnover of 73.433 million shares worth N173.733m in 908 deals. The third place was occupied by the oil and gas Industry with 62.711 million shares worth N2.702bn traded in 1,688 deals.
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