Dipo Olowookere
By Dipo Olowookere
The Nigerian stock market is anticipated to remain rooted in the red territory this week, some financial analysts have predicted.
Last week, as a result of sell offs, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) finished 2.54 percent lower at 30,874.17 points, with the market capitalisation reducing by N293.69 billion to settle at N11.272 trillion.
The local bourse pointed south in four of the five trading sessions last week, with the only gain, a 0.86 percent growth, recorded on Friday.
Investor sentiment weakened in the week with 23 stocks advancing stocks and 39 declining equities, while Continental Reinsurance emerged as the best performing stock after 33.3 percent week-on-week rise, with Diamond Bank closing as the worst performing stock after a w-o-w loss of 31.6 percent.
As investors prepare for this trading week, analysts at Lagos-based Cowry Asset said, “We expect the NSE ASI to close in red territory as bearish activity lingers amid higher interest rate environment, both home and abroad, and declining global crude oil prices.
“Speculators are expected to continue scrapping the market for short term gains as valuations and dividend yields remain attractive.”
Re-echoing this sentiment are analysts at Afrinvest, who opined that, “We expect to see some bargain hunting in early trades [this] week.
“However, we do not expect this to be sustained all through the week as the overall bearish sentiment, stoked by political uncertainty, is expected to weigh on market performance. Thus, we maintain our bearish outlook over the near-term.”
For analysts at Business Post, “The effect of foreign portfolio investors exiting the market will continue to weigh on the local bourse.
“We do not see the benchmark index closing green, though we expect some institutional investors to use the opportunity of the low valuation of stocks at the moment to re-enter the market.”
