By Modupe Gbadeyanka
Investors in the Nigerian stock market will this week focus on the purchase of high-value equities presently selling at low prices, different analysts have predicted.
For the past weeks, the value of some shares on the floor of the Nigerian Stock Exchange (NSE) has been low as a result of different factors from both the local and international scenes.
Last week, after President Muhammadu Buhari announced his cabinet and confidence returned to the market following the reappointment of Mrs Zainab Ahmed as the Finance Minister, who investors like due to the way she handled the economy when she was drafted to the ministry after the resignation of Mrs Kemi Adeosun.
First the first time in many weeks, the equity market posted a weekly gain of 3.25 percent. This was influenced by the 9.19 percent rise by the banking index, the 3.97 percent growth posted by the consumer goods index, 1.64 percent increase printed by the oil/gas index and the 1.21 percent appreciation by the industrial index.
However, the insurance index depreciated week-on-week by 1.38 percent.
Commenting on the outlook of the market this week, analysts at United Capital Research said, “More publication of H1-19 earnings by tier-1 banks should drive performance.
“More specifically, the formation of the cabinet is positive for direction but excitement may fizzle out as time goes on.”
On the part of those at Cordros Research, “Our view continues to favour cautious trading owing to the fact the gains recorded [last] week were not broad-based. However, compelling valuations support recovery in the medium to long term.”
For analysts at Cowry Asset, “We expect the domestic bourse to close in green territory as investors’ renewed interest is likely to be sustained amid interim dividend declaration by the leading tier-1 banks.
“Hence, we expect value investors to continue to take advantage of the low share prices and hold relatively long positions in order to partake in the high yielding dividend returns.”
In the view of analysts at Business Post, there would be heavy buying of stocks in the banking sector this week, especially the tier-one, in anticipation of the payment of interim dividend.
“We expect investors to look into the direction of GTBank and Zenith Bank stocks this week as the market await the audited half year results of UBA.
At the close of the week, we believe the market will remain in the green territory as a result of bargain hunting, though cautiously, with eye focused on happenings in the country and the international scene,” Business Post analysts posited.
Adedapo Adesanya