Mixed sentiments amid election fears have trail the equities market on the Nigerian Exchange Limited, NGX, last week ahead of the first policy meeting of the Central Bank of Nigeria (CBN) today and tomorrow.
Analysts have observed that the market’s sideways movement in the face of strong momentum is a reflection of profit taking and cautious trading as the recovery remains strong on the back of dividend hunting ahead of 2022 year end financials and corporate actions.
Analysis of trading showed that for the second consecutive week on the domestic bourse, the benchmark NGX All-Share Index, NASI, inched higher with 0.16% week-on-week rise to 52,594.68 points recorded last week.
The NASI’s year-to-date return was 2.62%, and investors gained N45 billion in two of the five sessions last week, owing to increased buy-power and momentum across some of the large and mid-cap stocks.
With the exception of the insurance and oil and gas indexes, which gained 1.78% and 0.35%, respectively, week on week, sentiments were mixed across the board from the previous two sessions. On the other hand, price declines and pressured sell-offs were witnessed in the banking index, which nosedived by 2.60% week on week and was followed by the industrial goods index (-1.06%) and consumer goods index (-0.40%) in that order.
Analysts at InvestData Consulting in their reaction on the market said: “ With the changing investor and traders’ sentiment across the globe due to the rising fear of recession, all eyes are on the outcome of next week’s meeting of the CBN’s Monetary Policy Committee slated for Monday and Tuesday as macroeconomic indices and developments point to the possibility of a slowdown in rates by central banks across the globe to avert economic contraction.
On market outlook, they added: “We expect mixed sentiment and trend to continue ahead of MPC meeting and volatility in the face of Q4 earnings expectation and election uncertainty, as pullback at this point add more strength to upside potential. As such, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.”
Reacting as well, analysts at Cowry Asset Management stated : “Looking activities of some equity investors, as momentum behind the uptrend and recovery remained strong on the back of swelling buying power ahead of 2022 corporate earnings and actions. However, investors continue to place bets on the possible outcome of the monetary policy committee meeting scheduled for Monday and Tuesday.”
