By Modupe Gbadeyanka
The Nigerian Stock Exchange (NSE) ended last week bearish, closing 1.27 percent lower to widen the year-to-date loss to 4.4 percent.
Business Post reports that during the week, investors lost a total of N169.8 billion to profit taking, which reduced the market capitalisation to N13.233 trillion.
The weekly loss came despite President Muhammadu Buhari assuring the investing community that his administration will use its second term to improve the economy, security and fight corruption; all which were his main focus during his first term in office.
The President, who gave this assurance during his June 12 speech, having failed to deliver one when he was sworn-in for another term in office on May 29, did not highlight how he intends to make things different this time around.
As the market opens for another trading week, analysts are of the view that things won’t change on the local bourse.
In fact, they warned that investors must remain very cautious in buying up some shares at the market this week because the volatility will remain except something very positive happens.
“In the new week, in the absence of major stimuli, we expect general bearish activity in the local equities market, although tinged with pockets of bargain hunting activity by speculators positioning ahead of H1 2019 corporate result announcements,” those at Cowry Asset said in their report.
Sharing the same opinion were those at United Capital Research, who said, “We expect market performance to remain tepid in the absence of a positive catalyst that could buoy sentiment.
“However, we do not rule out the possibility intermittent gain predicated on investors positioning for undervalued stocks.”
On the part of Cordros Research analysts, “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.”
Analysts at Business Post, in their report, stated that the equity market will remain bearish as investors now shift attention to the naming of cabinet members by the President.
“We do not see an immediate return of the bulls to the local stock market because things are still very gloomy.
“Last week, we expected the market to receive Mr Buhari’s speech with gladness, but things did not change as investors disregarded the promises made to improve the economy in his second term.
“Though we anticipate the mopping up of some fundamentally sound stocks this week ahead of declaration of interim dividends by few listed companies, the market will still close slightly bearish.
“After not being impressed with President Buhari’s June 12 speech, attention will now move to who the President will chose to be his ministers to help him achieve fulfilment of his promises,” they said.
