Nigeria’s equities market continued its rally on Monday by 0.26 percent or N179billion as analysts favour the bulls in their expectation of mixed sentiment trailing stocks this week.
Futureview research analysts said in their June 2 note that, “We anticipate a mixed performance in the equities market this week, with a modest bullish bias supported by anticipated buying activity”.
“Investor positioning is likely to be influenced by the upcoming Nigerian Treasury Bills PMA, while demand for undervalued stocks is expected to provide additional market support,” Futureview analysts added.
The Nigerian Exchange Limited All-Share Index and Market Capitalisation increased from 111,742.01 points and N70.462 trillion respectively to 112,026.24 points N70.641 trillion.
“As June opens, the market is poised for a mixed start to this week. Investors may continue to rebalance portfolios, and potential dividend flows could provide near-term support.
“However, in the absence of clear catalyst, sideways movement may persist, especially amid light volumes,” said Vetiva Research analysts in their breakfast report ahead of Monday’s trading
Stocks like Fidelity Bank, Royal Exchange, Access Holdings, Cutix, and United Capital were actively traded stocks. In 17,019 deals, investors exchanged 517,950,316 shares valued at N10.070billion.
“This week, our focus remains on dividend-driven market movements and investors’ sentiment, especially around markdowns, announcements, and earnings momentum,” CardinalStone Research said.
Multiverse led the market’s league of top gainers after rising from N7.60 to N8.35, adding 75kobo or 9.87 percent. Also, Livestock Feeds increased from N9.40 to N10.30, adding 90kobo or 9.57 percent. Lasaco moved from N2.59 to N2.80, adding 21kobo or 8.11 percent, while Neimeth made the list after its share price moved from N3.10 to N3.35, rising by 25kobo or 8.06 percent.
“Looking forward, the equities market might be mildly positive leading to a slight gain in the ASI. This is hinged on the market benefiting from the spillover effect of excess liquidity in the financial system.
“Similarly, investors might start positioning for Q2-earning season in June, favouring corporates with FX gains, cost control, clear growth trajectory, and those with potentials for quality interim dividend payment,” United Capital Research analysts said in their recent note.
On the flip side, they noted that NT-Bills auction and potential OMO auction might reduce the inflow of funds into the equities market “as elevated OMO and NT-Bill yields (about 24 percent) keep investors anchored in money market instruments.
“Similarly, positive sentiments will be moderated by elevated inflation, heightened interest rate, weak Naira and general uncertainty in the global and domestic macroeconomic space.
“We expect retail investors to continue to take profit from previous week’s gains, tactically slowing the upward movement of the equities market. We advise investors to cherry pick fundamentally sound stocks with potential for interim dividend payment,” United Capital research analysts said.