Nigeria bourse: Analysts expect investor appetite to stay strong this week

Going by recent macroeconomic indicators signaling improvements in the general condition of the economy, analysts at Afrinvest say investors’ appetite would remain strong this week, adding that its weekly sentiment indicator shows positive, rising two basis points from 2.3 points last week to 2.5.

They however did not rule out the possibility of some investors taking profit in the early trading days.

“We do not rule out the possibility of some investors taking profit in the early trading days of the week as market’s 14-day RSI (79.5) is currently around the overbought region,” the said.

Their top of the week stock pick is Total Nigeria Plc, one of the major players in the downstream oil and gas sector with a broad distribution network of over 500 service stations nationwide and a wide range of top quality energy products and services.

The company’s FY:2016 results indicated a growth of 39.9% and 265.6% to N291.0 and N14.8bn in topline and bottom line respectively. While in the corresponding period in Q1:2017 Total recorded a 34.8% growth to N80.5bn while PAT declined 5.4% to N2.7bn.

Afrinvest believes the company will continue to benefit from developments in the downstream oil and gas sector and expects the dividend payment trend to continue.

“We have a 12-Month TP of N311.10 which represents a 19.7% upside to current price (N260.00). Hence, we recommend a “BUY” rating on the stock,” they said.

The Nigerian equities market closed 3.4% higher week-on-week (W-o-W) to settle at 29,064.52 points while YTD gain improved to 8.1%.

Sector performance mirrored the broader index as 4 of 5 indices appreciated W-o-W. The Banking and Insurance indices appreciated the most, up 7.6% and 3.7% W-o-W while the Consumer Goods index followed, adding 1.7% W-o-W. Similarly, the Industrial Goods index also inched 0.1% higher W-o-W. On the contrary, the Oil & Gas index depreciated 0.9% W-o-W.

By Business a.m. live staff