Expectations of Analysts at Stock Market This Week

By Modupe Gbadeyanka

Last week was a very busy one at the Nigerian Stock Exchange (NSE) as investors and analysts were engaged in the analysis of results of listed companies for the first quarter of 2019.

Though some companies disappointed with their earnings, especially Dangote Cement, which did not excite shareholders with its results, few others were amazing.

At the close of transactions last week, the stock market remained underwater, after losing 1.78 percent week-on-week to leave the year-to-date loss to 7.06 percent.

But this week, analysts at Cowry Asset said there should be a slight improvement in the market indices.

“In the new week, we expect domestic equities market to close marginally in green territory. Hence, we feel investors would take advantage of the low share prices to buy the dip,” they said.

According to analysts at Afrinvest, the lack of positive news to trigger buying pressure will continue to leave the market bleeding profusely and also make the bears and bulls fight for a firm control of the market.

“We view the market as lacking drivers for a sustained bullish run and so expect the market to continue to trade sideways, with profit-taking and bargain-hunting activities dominating an equal amount of trading session over the short term,” they said.

Consequently, the analysts opined that, “This week, we expect to see profit taking activities in some bellwether stocks which could potentially drive negative returns in the NSE ASI.

“However, we maintain a cautiously optimistic outlook as investors’ sentiment show signs of improvement.”

In the view of analysts at Vetiva Research, “We expect a mixed trading pattern today and a positive bias, as investors look out for bargains on already beaten down stocks.

“We foresee activity levels remaining average in the absence of any catalyst to alter the trend.”

Business Post analysts are also of the view that there will likely not be any change in the performance of the market this week because of low confidence of investors at the moment.

“While we expect some investors to continue to load their portfolios with ‘good’ stocks trading at low prices at the moment, others will just use this opportunity to quickly take profit and watch the market from the sidelines.

“This started to manifest last week when the share price of one of the market’s newest darlings, Dangote Flour, began its downtrend last Friday after its initial rise as a result of news of the company’s proposed acquisition by Olam for N130 billion at the average share price of N26 per unit.

“We see the market still closing in the red zone at the end of this week and if there would be a rise, it would be very marginal.

“However, this is still the best time for smart investors to enter the market, especially when there are people willing to sell off some of their holdings,” analysts at Business Post said.