Market Analysts Expects a Bearish Run This Week in the NGX

After a mixed trading session last week, market analysts at the Nigerian capital market have still come to say that investors at the NGX should expect a bearish run, which will involve more portfolio selling as the market seeks catalyst and policy direction from economic managers to push positive sentiment.

Last week, it was a loss at almost all ends; even a green run was less compared to previous weeks ruled by the Santa Claus era. Big conglomerates, as did market capitalisation and trading indexes such as the NGX ASI, witnessed their stocks drop.

Optimism From Market Analysts

Ambrose Omordion, the Chief Operating Officer of InvestData Consulting Limited, said, 

• We expect mixed sentiment to continue as players digest the latest GDP data and outcomes of the Debt Management Office (DMO) and Central Bank of Nigeria (CBN) 's recent auctions (CBN) in the face of expected audited corporate earnings and ongoing portfolio rebalancing.

• This is amidst the volatility and upcoming policy meeting, while pullback at this point will add more strength to the upside potential. As such, investors should take advantage of price correction. Also, looking at the trends and events across the globe and domestically.

Also, Cowry Asset Management Limited said, 

• We anticipate the bearish sentiment to continue as the market seeks economic managers' catalysts and policy direction to trigger the positive sentiment.

• However, as we anticipate more corporate releases for the final quarter of 2023, investors will begin to rebalance their portfolio in their search for alpha amidst the rising fixed-income yields and outcome of the monetary policy meeting. Meanwhile, we continue to advise investors to take positions in stocks with sound fundamentals.

Meanwhile, Afrinvest Limited said, "In the new week, we expect bargain-hunting opportunities to boost market performance."

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A Look at Last Week's Trading Activities

Last week, the NGX Market finished on a bearish note following investors' part in selloffs. The All-Share Index declined by 3.44% week-on-week to close at 102,088.30 points, while market capitalisation lost N1.99 trillion to close the week at N55.861 trillion.

The NGX market breadth for the week was negative as 14 equities appreciated, 66 equities depreciated, and 74 equities remained unchanged. 

Top Gainers: Juli led with 59.18% to close at N2.34 per share. SUNU Assurance followed with a gain of 17.42% to close at N2.09, while FBN Holdings (FBNH) went up by 10.71% to close to N31.00 per share.

Top Losers: Morison Industries led with 32.66% to close at N1.67 per share. Consolidated Hallmark Insurance followed with 19.35% depreciation to close at N1.25, while Sterling Financial Holdings Company declined by 18.69% to close at N4.35 per share.

The week noticed a total turnover of 1.377 billion shares worth N31.584 billion in 42,040 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 1.559 billion shares valued at N36.497 billion that exchanged hands the previous week in 42,546 deals.

The Financial Services Industry (measured by volume) led the activity chart with 960.519 million shares valued at N16.844 billion traded in 19,669 deals, contributing 69.77% and 53.33% to the total equity turnover volume and value, respectively. The Conglomerates Industry followed with 115.241 million shares worth N1.511 billion in 2,859 deals, while the Oil and Gas Industry traded with a turnover of 80.866 million shares worth N1.721 billion in 2,726 deals.

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Trading in the top three equities, Guaranty Trust Holding Company (GTCO), FBN Holdings (FBNH), and Transnational Corporation (measured by volume), accounted for 343.584 million shares worth N9.431 billion in 5,659 deals, contributing 24.96% and 29.86% to the total equity turnover volume and value respectively.