NIGERIAN STOCK EXCHANGE RECORDS MARGINAL INCREASE

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Last week, the Nigerian stock market saw a slight increase, driven by MTN Nigeria Plc and other banking stocks. This rise was the result of investors reshaping their portfolios based on evaluations of companies’ earnings reports for the first half of 2023 (H1’23). Specifically, the Nigeria Exchange Limited’s (NGX) All-Share Index (ASI) gained 0.2%, closing at 65,325.37 points compared to the previous week’s 65,198.08 points.

Another key metric, the NGX market capitalization, went up by N93 billion, reaching N35.572 trillion from the previous week’s N35.479 trillion. As a result, the Month-to-Date (MtD) and Year-to-Date (YtD) returns were slightly higher at +1.5% and +27.5%, respectively.

Despite these gains, the market still exhibited subdued activity levels. Trading volume and value both decreased by 32.4% Week-on-Week (WoW) and 15.3% WoW, respectively. Looking at the various sectors, the Banking Index witnessed a rise of 1.3%, the Insurance Index increased by 0.7%, while the Consumer Goods Index decreased by 0.9%. The Industrial Goods Index grew by 0.4%, and the Oil and Gas Index had a modest increase of 0.3%.

Analysts from Cordros Research offered their insights on the market performance and outlook. They anticipated a mixed market performance in the upcoming week as investors adjusted their portfolios based on evaluations of corporate earnings released thus far for H1’23.

The analysts expected positive market sentiments to be boosted by earnings from Tier-1 banks in the following week(s); especially in anticipation of interim dividends. Despite these positive aspects, they emphasized the importance of investing in fundamentally sound stocks due to the persistently weak macro environment, which posed a challenge to corporate earnings.

Similarly, analysts from Investdata Consulting shared their perspective. They predicted a combination of sentiments in the market; including bargain hunting and the digestion of corporate earnings. This was expected to be influenced by positive news, upcoming July inflation data, and earnings reports from First-tier banks.

They noted that pullbacks were creating opportunities for investors amid ongoing government economic reforms and policy announcements. They believed that this situation would ultimately provide investment direction.

Additionally, they highlighted the significance of Q2 earnings reports in confirming the true state of company performance and attracting liquidity; particularly during markdown dates and the release of remaining audited accounts. Their observation was that discerning investors continued to prioritize fundamentally sound companies and defensive stocks to safeguard their portfolios.

 

 

 

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