Airtel Listing, Earnings to Buoy Performance—Analysts

July 8, 2019
Nigerian Stock Market

By Modupe Gbadeyanka

There are very strong indications that the planned listing of Airtel Africa Plc shares on the Nigerian Stock Exchange (NSE) will broadly boost performance of the market this week.

In the past days, the local stock market has been bleeding and like its rival did about two months ago, analysts are of the view that Airtel will make life better for investors.

The company is planning to begin trading of 3.758 billion units of its shares on the stock exchange at N363 each from tomorrow.

Commenting on the expectations, analysts at United Capital Research said, “This week, risk for equities is unlikely to change significantly with the expected listing of Airtel broadly driving performance.”

However, Meristem Research said it does not expect the listing of Airtel Africa “to drive gains in the market. On a balance of factors, we expect the bearish sentiments to continue this week.”

Away from Airtel listing, Cowry Asset is of the view that market will close positive this week as a result the earnings season.

Already, some companies have announced holding board meetings this month to consider their half-year results, while few have said they might consider paying interim dividend to shareholders. This alone is enough push for mopping up of such stocks by investors in anticipation of a cash reward from the firms.

“In the new week, we expect the local equities to rebound as we draw closer to earnings season and investors await positive corporate performances,” Cowry Asset said.

Vetiva Research, in its report, said, “As some listed companies begin to enter their closed periods this week, we expect cautious investor interest to trickle back into the market.

“We believe our macro fundamentals remain positive, but the lack of policy direction will still weigh on the market. Therefore, we expect sideways trading to persist in the market this week.”

For analysts at Afrinvest, they are of the opinion that the “bearish run would continue as investors maintain a risk-off approach towards investing in the domestic equities market. This week, we expect Airtel listing on the bourse to drive activity level.”

In the opinion of analysts at Business Post, investors will continue to stay watchful of developments in the market before taking an appropriate action.

“We do not foresee any rush for Airtel Africa shares by investors this week and the telco will possibly not have huge impact on the market in terms of the index except on the market capitalisation, which would be buoyed by N1.4 trillion.

“We see the market closing bullish as a result of earnings expectations, especially from value stocks, which would announce interim dividend when their half-year results are eventually announced.,” Business Post said in its weekly projections.

Modupe Gbadeyanka

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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