The publication of more corporate earnings for the first half (H1) of 2021 is expected to influence the direction of equity trading this week as investors continue to trade cautiously.
Analysts at Cowry Asset Managements Limited said: “In the new week we expect the stock market to trade positively as the position of investors in stocks of companies likely to pay interim dividends and the Declining returns in the fixed income market serve as a catalyst for investors looking for a higher return on investment (ROI).
In addition, analysts at Cordros Securities Limited said, “We expect the bulls to resume their dominance in the market given the moderation in leading stock prices this week amid lower yields in the stock market. fixed income securities.
“However, we are not ruling out the possibility of continuing profit-taking activities. As a result, we believe the choppy business model that unfolded this week will persist into the week ahead.
“Overall, we advise investors to only take positions in fundamentally justified stocks, as the weak macro environment remains a significant barrier to corporate earnings.”
Afrinvest Limited noted that, “over the coming week we expect market performance to be driven by a mix of profit taking and bargain hunting activities.”
Regarding the market outlook for this week, InvestData Consulting Limited COO Mr. Ambrose Omordion said: Shares on strength in half-year earnings reports as investors continue to shuffle their portfolio and the study of corporate profits ahead of the results of leading banks and the release of second quarter GDP data, as well as the results of banks paying interim dividends. “
He added that investors are still watching the interplay of market forces following recent developments in the forex market as the Central Bank of Nigeria (CBN) plans to launch a digital currency platform. “Today’s low volume suggests institutional investors and others are still watching the numbers cautiously. It should be noted that the price of oil continues to oscillate on the international market; as well as equity securities and interim dividend opportunities, are just around the corner.
“We also note that some stocks are trading within their buy ranges to become more attractive at this point for income investors and traders, although the market is anticipating positive news as the price of oil continues to oscillate. above $ 68 per barrel to support the global economy and stock market recovery in all climates. We also expect the ongoing COVID-19 vaccination to support the global and national economic recovery which is expected to improve the market and give direction, ”he stressed.
He added that the banking sector and others remain attractive due to prevailing low prices, despite mixed half-year earnings, advising investors to target dividend-paying stocks and fundamentally healthy companies with growth prospects in 2021 and beyond that, looking at the poorly valued stocks before the interim dividend announcement and the economic activities of the last quarter.
“This is all the more important given that despite the apparent improvements, the performance of fixed income securities continues to offer a negative real rate of return due to soaring inflation. However, the stronger and faster recovery may continue, depending on market forces, going forward, as propelled by the second quarter expected earnings reports, ”he said.
Meanwhile, the Nigerian equity market last week was negative as investors registered profits on the shares given their recent price increases. As a result, the NGX All-Share Index fell 39.26 points or 0.10% week-over-week (WoW) to close at 39,483.08 points. Likewise, market capitalization declined by 21 billion naira to close at 20,571 billion naira.
Performance across the industry was bearish. The Consumer Goods Index led the losers, down 6.3% on WoW following depreciation in prices at Nestlé Nigeria, Cadbury Nigeria and Flour Mills of Nigeria. Follow closely the Oil & Gas and Insurance indices, which fell by 1.2% and 1.0% WoW respectively due to the fall in prices of Total Nigeria,
Oando, Linkage Assurance and Mutual Benefits Assurance, while the banking index fell 0.8% due to selling pressure on Access Bank and United Bank of Africa (UBA). On the other hand, the industrial goods index rose 1.9% on WoW due to the interest in buying in Dangote Cement and Lafarge Africa.
However, the market scale for the week was positive, 36 stocks appreciated in price, 33 stocks depreciated in price, while 87 stocks remained unchanged. Honeywell Flour Mills led the winning table 46.34 percent to close at N 3.00, per share. Pharm-Deko Plc followed with a gain of 44.54 percent to close at N 1.72, while Courteville Business Solutions rose 29.17 percent to nearly 31 kobo, per share.
On the other hand, Meyer Plc topped the chart down 66.10% to close at 20kobo, per share. SCOA Nigeria followed with a loss of 18.46 percent to close at N 1.59 and Consolidated Hallmark Insurance fell 13.21 percent to close at Kobo 46, per share.
Overall, a total of 866.544 million shares worth N12.257 billion in 17,291 trades were traded last week by investors on the exchange floor, compared to a total of 1.610 billion. N12.586 billion shares that traded hands the week before in 18,622 trades.
The financial services industry, measured by volume, dominated the activity chart with 445.324 million shares valued at 3.676 billion naira traded in 7,560 transactions; contributing 51.39 percent and 29.99 percent respectively to the volume and value of total stock sales. The consumer goods industry followed with 119.649 million shares worth 4.969 billion naira in 3,424 transactions, while ICT traded a turnover of 87.132 million shares worth of 1.938 billion naira in 924 transactions.
Negotiate the three main actions; Honeywell Flour Mill, Transnational Corporation of Nigeria (Transcorp) and Guaranty Trust Holding Company (GTCO), measured by volume, accounted for 203.753 million shares worth N 1.964 billion in 2,515 transactions, contributing 23.51% and 16.02% of the total turnover of the shares. and the value respectively.
On the Exchange Traded Products (ETP) platform, a total of 1.001 million units valued at N16.762 million were traded last week in 14 trades, compared to a total of 28,938 units valued at N949.074 , 38 traded in the previous week in 13 deals, while in the bond market, a total of 30,877 units valued at 31.842 million naira were traded last week in 14 deals, compared to a total of 139,062 units valued at 139.702 million naira traded the previous week in 19 transactions.