Business
THE bounce back recorded in the stock market last week has been reversed following massive selloffs and losses in blue chip companies including, Airtel Africa, Dangote Cement and MTN Nigeria.
The development significantly impacted the major market indices, with the Nigerian Exchange Limited, NGX All Share Index, ASI dropping 0.68 per cent Week-on-Week, WoW, to close at 43,968.75 points from 44,269.18 points penultimate week.
As a result, the ASI’s Year-to-Date (YtD) return fell to 2.93%, while another major indicator, the market capitalization, lost N161.54 billion WoW to close at N23.95 trillion against N24.112 trillion recorded penultimate week.
Analysts have explained that the bearish run on the stock market in the past three months was driven by Central Bank of Nigeria, CBN, rate hikes and others factors like 2023 general election, insecurity and Foreign Exchange market instability.
Analysis of the market last week showed that Airtel Africa lost 0.39% WoW, Dangote Cement (0.62%) and MTN Nigeria (2.04%) to keep the market in the red, eroding gains in First Bank Nigeria Holdings which moved up by 3.54%, Access Corporation (1.26%), and Geregu 8.50%.
Commenting, analysts at InvestData Consulting, stated : “We expect mixed sentiments to continue on portfolio repositioning and bargain hunting in the midst of expected macroeconomic data and election uncertainty, as investors are taking advantage of the low prices to reposition ahead Q3 GDP report and year end seasonality.
“The next outcome of Monetary Policy Committee, MPC meeting could trigger the news-based market movements.”
Commenting as well, analysts at Cowry Asset Research said, “Going into the new week, we expect the market to trade in the bullish region despite the absence of a major trigger that is likely to drive activities in the market for investors seeking alpha. However, we continue to advise investors to trade on companies’ stocks with sound fundamentals and a positive outlook amid the macro-dynamics which remains a headwind.”
Another investment house, Cordros Capital, while projecting on the market outlook for the week, stated: “We expect economic growth to remain pressured in the short-to-medium term, given the troika effects of (1) tight monetary conditions, (2) a fall in real household incomes, and (3) supply constraints exacerbated by the Russia-Ukraine conflict. Accordingly, the economy is on course for its fastest return to recession since the mid-1970s.”
-Vanguard
KN
Tags: AIRTEL Africa CBN Dangote Cement MTN Nigeria
