Stock Recommendation for this Week (Nov 20)

By Meristem Research

The Nigerian equities market closed in the negative zone last week, as the NSEASI dropped 1.12% to pull the Year-to-Date return to 36.57%.

Twenty stocks advanced while 42 declined, pegging the market breadth at 0.48x.

AGLEVENT was the top gainer in the week, after advancing by 27.70% to close at NGN0.70. In contrast, CAVERTON shed 21.43% of its value to close at NGN1.32.

While the significant trade on DANGCEM drove the market to a positive close on the first day, notable sell-offs on large cap stocks during subsequent days of trading, especially in the consumer goods space, led to significant losses which resulted in a negative WoW performance.

MARKET PREVIEW For the week commencing November 20, 2017 Following the announcement of the MSCI’s decision to retain Nigerian equities in the Frontier Markets Indexes, and the changes made to the composition, we expect investors to continue to react to this news in the near term.

Also, we envisage the positive performance in the banking space in the latter trading days to strengthen in the course of the week, as we expect some of the large cap stocks which shed value WoW to reverse the negative trend.

Given that the year is drawing to a close, we expect portfolio rebalancing to cause a rally on stocks with strong fundamentals. Consequently, we expect the market to close positively.

Modupe Gbadeyanka is a fast-rising journalist with Business Post Nigeria. Her passion for journalism is amazing. She is willing to learn more with a view to becoming one of the best pen-pushers in Nigeria. Her role models are the duo of CNN's Richard Quest and Christiane Amanpour.

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