Volatility, short-lived gains expected this week as investor sentiments in equities remain weak
Adesola Afolabi was a businessamlive reporter and Head of Financial desk.
A measure of volatility on the local bourse as well as an end to the bullish run recorded at the equities market last week is expected in the coming weeks analysts have said.
Capital market experts at Financial Derivatives Company (FDC) in an outlook for the coming weeks noted that investors are likely to take advantage of low-priced stocks in the market, however experts at Afrinvest noted that the bullish run recorded in the week ended Friday 23 August 2019, will be short lived due to sustained weak investor sentiment in the market.
The market closed last week with a gain of 3.2 percent as gains recorded in 4 of 5 trading days lifted the All Share Index (ASI) to 27,800.17 points moderating year to date losses to -11.6 percent.
Investors also gained N83 billion last week as market capitalisation increased to N13.5 trillion.
The gains recorded in the equities market in the course of the week were attributed to a positive reaction of the appointment of ministers. Analysts at United Capital said that the euphoria was perhaps with an expectation that hastened fiscal policies and implementation of plans might revive the Nation’s lacklustre growth.
They however noted that, they had imagined that there would have been more hands-on deck for portfolios that directly relate to the day to day running of the economy. Such as: finance, budget and national planning, considering the fact that, there was an uptick in the number of ministers. They added that “there is nothing overly exciting about the new cabinet until the elected ministers dig holes in the ground and get to repairing the Nigerian economy.”
A review of sectoral performance last week by analysts at Afrinvest indicated that the Banking index emerged the top gainer with a 9.2 percent growth owing to price appreciation in ETI and Zenith Bank which appreciated 33.3 percent and 12 percent respectively.
The consumer and industrial goods indices trailed with an appreciation of 4 and 2 percent respectively as a result of buying interest in Honeywell flour that rose (14.6%), Nestle (7.6%), Berger (9.5%) and Cement Company of Northern Nigeria (2.8%). Investors positioning in Oando and MTN Nigeria saw the Oil and Gas and AFRICT indices rise by 1.6 percent and 1.3 percent while the insurance index depreciated 1.4 percent as a result of a price drop in Lasaco Assurance (12.1%) and Continental Re-Insurance which lost 10.3 percent last week.