Fundamentally Sound Stocks to Lift Equity Market This Week—Analysts

By Modupe Gbadeyanka

Analysts in the capital market have predicted that this week, the equity market will welcome back bulls.

This, they said, would be buoyed by the purchase of “fundamentally sound stocks” by investors during the week.

“This week, we expect the local bourse to close in the green territory as investors take advantage of the low prices of some fundamentally sound stocks,” analysts at Cowry Asset said in their weekly ‘Financial Markets Review & Outlook.’

Last week, the stock market depreciated by 1.34 percent week-on-week with the market capitalisation reducing by about N200 billion.

Apart from the NSE Consumer Goods Index, which appreciated by 0.03 percent, every other sectors closed in red.

The NSE Banking index, NSE Insurance index, NSE Oil/Gas Index and NSE Industrial Index dropped by 2.80 percent, 0.80 percent, 2.64 percent and 1.37 percent respectively last week.

For analysts at Meristem Research, profit taking was the order of the day as investors sold off counters which had recorded gains in the last two weeks.

“We expect buying pressure to return to the sector next week, following the declines recorded thus far,” they said.

However, analysts at Vetiva Research said, “Given the predominantly negative sentiment on the exchange –indicated by negative sector closes, market breadth and down trending intraday chart, we foresee another downbeat session.”

But those at Cordros Research said, “Despite continued selloffs in the equities market, still-strengthening macroeconomic fundamentals remain suggestive of gains on the exchange.”