Earnings releases to shape market outcome this week

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Stanley  Opara

Earnings releases expected this week will determine the performance of the Nigerian equities market, analysts have said.

While the market is also expected to see mixed trading, it is anticipated that a sort of bargain-hunting will prevail.

Hence, analysts at Vetiva Capital, in the firm’s weekly report, said, “For the equities market, we expect mixed closes to persist across key sectors in the coming week as a mix of bargain hunting (particularly in consumer goods stocks) and reactions to earnings releases dictate overall market direction.”

Considering the liquidity mop up at the end of the past week, the analysts, for the fixed income market, expect trading in Treasury bills to start off cautiously this week while buying momentum is predicted to continue in the bond space.

Bearish sentiment persisted on the Nigerian bourse as the Nigerian Stock Exchange All-Share Index lost 69 basis points week-on-week, and stretched its year-to-date returns to -6.36 per cent. The market traded lower in the opening two sessions, particularly pressured by sell-offs across consumer goods sector blue chips.

However, after a flash rebound in Nigerian Breweries Plc, which propelled the consumer goods sector index to its first positive close in seven sessions, the NSE ASI turned green at mid-week, also helped by weighty gains in Forte Oil Plc and Dangote Cement Plc.

On Thursday, the market hurriedly returned to the red as the consumer goods sector resumed its downtrend.

At week close, the market trended higher bolstered by bargain-hunting in beaten down consumer goods stocks and gains in select  banking names.

Meanwhile, the oil/gas sector snapped a five-session losing streak amid quick profit taking on recent gains.

Ahead of the bond and Treasury bills auction at mid-week, the fixed income market traded mixed amid relatively tight system liquidity. Meanwhile, at the bond auction, the Debt Management Office sold N160bn across the five-year, 10-year and 20-year bonds (offered: 110bn).

With respective stop rates of 16.550 per cent, 16.612 per cent and 16.770 per cent coming in lower than recent auction levels, strong bullish sentiment surfaced in the secondary market with significant yield moderations recorded across most maturities.

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