By Modupe Gbadeyanka
The Nigerian Stock Exchange (NSE) has struggled to keep its head above water since MTN Nigeria Plc was hit with news of the Economic and Financial Crimes Commission (EFCC) raiding its head office in Lagos to investigate how it was listed on the local bourse.
When the telco joined the Nigerian stock exchange on May 16, 2019, the market was booming, but that news story on May 24, 2019, gradually brought an end to the honeymoon.
Since then, the market has been battling hard to escape from the tight grip of the bears without much success.
As the market begins trading this week, analysts have said investors should not expect any miracle to occur in the absence of any positive event to trigger the return of the bulls.
This week, precisely on Wednesday, June 12, 2019, President Muhammadu Buhari is expected to address the nation, where he should roll out his plans for the next four years in office.
On May 29, 2019, when he was sworn-in for another four years in office, he did not give any speech as expected, but shifted it to this week, which is now to be celebrated as Democracy Day with a public holiday.
During trading last week, profit taking activities dominated the stock market and if nothing positive happens this week, this trend is expected to continue.
This view was echoed by analysts at Cowry Asset, who said, “In the new week, in the absence of major stimuli, we expect sustained bearish pressure on the local equities market as investor apathy pervades the bourse, resulting in general sell offs amid flight to safety.”
Sharing this same sentiment were those at United Capital Research, who said the bears will maintain dominance, though the bulls will attempt to bellow so as to attract attention of investors.
“Looking ahead, we expect market performance to remain lukewarm in the absence of a catalyst. However, we do not rule out the possibility of intermittent gains driven by bargain hunters,” they said.
For analysts at Cordros Research, “We reiterate our view that the blend of a compelling valuation story, together with positive macroeconomic picture leaves scope for market recovery in the medium term. However, we guide investors to tread the cautious trading path in the short term.”
Those at Afrinvest Research said, “Although we expect bargain hunting on stocks which have recently suffered losses next week, we believe sentiment would remain bearish in the absence of any major market catalyst.”
Analysts at Business Post are of the opinion that investors will want to trade cautiously this week and watch how things will turn out, especially with the issue between Oando and the Securities and Exchange Commission (SEC).
“We do not expect heavy transactions this week as investors mainly look forward to President Buhari’s June 12 speech.
“They will also want to know what becomes of the Oando saga with SEC especially with the AGM already fixed for Tuesday.
“With all these in mind, we do not expect the market to close positive this week as investors will want to continue to take profit and watch events from a safer region.
“However, as we have always advised, this is the best time to mop up some sound stocks presently trading at low prices, especially those that could give holders interim dividends in a month’s time,” analysts at Business Post said.
