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Analysts foresee boost in market activities this week
Capital market analysts have said that the increase recorded in major
market indicators of the Nigerian Stock Exchange towards the end of
last week will be sustained this week.
The analysts said specifically that the increased momentum in the
indices would likely be driven by the banking and financial sectors
The analysts hinged their prediction on the expected full year results
to be released by the banks and other financial companies this week.
At the close of trading activities last Friday, the NSE All-Share Index
appreciated by 227.46 points or 1.1 per cent to close at 20,592.02
points, up from 20,364.56 at the beginning of the week.
Similarly, the market capitalisation of the 187 First-Tier equities rose
by N72bn or 1.1 per cent from 20,364.56 points at the beginning of
the week, to 20,592.02 points on Friday.
The NSE Banking 10 Index, which recorded the highest appreciation
last week, rose by 6.57 basis points or 2.1 per cent from 301.98 basis
points on Monday, to close at 307.95 points.
Reviewing this in their report for the week released on Friday, analysts
from Vetiva Capital Management Limited said that usually the release
of full year results boosted increased activities in the market.
According to them, it is likely, that after weeks of instability in the
market, the major market indicators will record significant
improvement this week.
They said, “On the NSE, the Index recorded losses on the first three
trading days of the week due to profit taking activities of investors
from gains in the previous week; the last two days however, saw gains
on revived investor interest, and as a result, the index finished the
week up by 1.1 per cent.
“Therefore, the nearing full year 2011 earnings season is bound to
sustain buying momentum in equities market this week, especially
among the financial services stocks.”
On their part, analysts from Meristem Nigeria Limited said that the
equities market still held a lot of promise for wise and long-term
investors.
They added that notwithstanding the recent increase seen in the fixed
income market, there were still a lot of concerns about the
sustainability of bonds in terms of real returns for investors.
The analysts said, “Recent uncertainties in the investment climate
have switched investors’ appetite in favour of fixed income
instruments; this switch has been met with high yield environment
occasioned by rising inflation and interest rates.
“Data from the latest Debt Management office bond auction suggests
falling yields, and if the inflation rate exceeds the coupon rates,
erosion in the value of the real returns is inevitable, and the equities
market is set to benefit from the mix of monetary policy comments
flowing into the marketplace. We, therefore, advise investors keep
equities under their radar.”
Udeme Ekwere
Punch March 5, 2012