Ahead of the presidential election this month, analysts have predicted a continuous bearish trend in the equity market on the Nigerian Stock Exchange, NSE, this week as investors continue to take short term position on equities with good fundamentals.
After two consecutive weeks of gains, investors began to book profits last week leading to the decline in the NSE All Share Index , ASI by 2.5 percent Week on Week, W-o-W and -2.5 percent Year to Date, YtD, to close at 30,636.36 points while market capitalisation decreased by N294.7 billion to close on Friday at N11.4 trillion.
Meanwhile, investors in the nation’s stock market lost a total of N326billion in January as bearish sentiment persisted.
Reacting to the market condition, analysts at a Lagos based investment firm, Cordros Capital said: “Against marked sell-offs across bellwether stocks, the Nigeria’s equities market closed the last session of the month on a negative note. Our outlook for equities in the near-to-medium term is negative, and we guide investors to trade cautiously, amidst absence of a near term positive catalyst and political jitters ahead of the upcoming 2019 elections. However, macroeconomic fundamentals remain stable and supportive of recovery in the long term.”
Similarly, analysts at Afrinvest Research said: “In our opinion, this further confirms that investors are still on the sidelines and may only take short term positions till post-election stability is established. As we move into a new month, we maintain our bearish outlook on the market, although the earnings season could see market rally in the period. “
Market analysis last week, showed that investor sentiment as measured by market breadth indicated that 16 stocks advanced relative to 50 stocks that declined. The best performers were ABC Transport gaining +24.1 percent to close at N 0.36, Mutual Benefit garnered +10 percent to close at N0.22 .Beta Glass surged by +9.1 percent to close at N 60.00, followed by Sterling Bank rising by N 8.41 and UACN Property garnered 8.18 percent to close at N1.72 while Consolidated Insurance led the laggards as it dropped by -17.14 percent to close at N0.29 , followed by Niger Insurance which declined by -15.38 percent to close at N 0.22. Dangote Flour nosedived by -10.8 percent to close at N 5.80. Ikeja Hotel lost -10.7 percent to close at N1.50, and Academy Press declined by -10.71 percent to close at N 0.45.