By Nkiruka Nnorom
After taking a hit from the postponement of the presidential and parliamentary election last week, investment analysts have said that the equities market will reverse the losses post-election.
As in the previous week, they hinged their expectation on a successful, violent-free and post-election stability.
In the just concluded week, the domestic equities market took a hit as investors stayed on the sidelines amid shift in the 2019 general elections dates. The fall in overall market performance was despite the positive result and increased dividend payout by Zenith Bank Plc that resulted in rise in the market on Tuesday and Wednesday. The benchmark All Share Index, ASI, fell to 32,515.52 points, having lost 0.61 percent week-on-week (w/w).
Electoral Commission Officers await for voters as a polling station opens at Agiya polling station in Yola, Adamawa State, Nigeria on February 23, 2019, the day of the general elections. – Nigerians began voting for a new president on February 23, after a week-long delay that has raised political tempers, sparked conspiracy claims and stoked fears of violence. Some 120,000 polling stations began opening from 0700 GMT, although there were indications of a delay in the delivery of some materials and deployment of staff, AFP reporters said. (Photo by AFP)
Also, the equities market capitalisation fell by N77 billion to N12.123 trillion, representing 0.63 percent decline.
Analysts at Meristem Securities attributed the bearish sentiment that permeated the market last week to investors taking profit off the market rally enjoyed in the previous weeks. “Coupled with that was the negative reaction to the general election’s postponement which raises uncertainties that cloud decision making,” they said.
However, making a projection into the week, analysts at Cowry Asset Management, said: “In the new week, we expect the Nigerian equities market to close in green territory as Nigerians finally get back to the polls tomorrow (Saturday, February 23) to elect their president.”
Equities pricing: Negative outlook to prevail as investors lose N293.69bn
Corroborating the earlier view, analysts at Vetiva Capital Management, stated: “Barring any negative surprises at the polls, we anticipate a positive start to this week’s trading as investors price in improved certainty upon conclusion of the general elections.”
Also, Cordros Capital, another investment banking firm in its weekly review of the market guided investors to pick fundamentally sound stocks in order to benefit from the expected rally post-polls.
Meanwhile, breakdown of sectoral performance last week showed that activity was mixed across sectors with the consumer goods and industrial goods sectors closing in negative territory as they plummeted by 1.53 percent and 1.39 percent to 752.88 points and 1,264.66 points respectively. However, banking, insurance and oil &gas sectors rose by 0.68 percent, 0.02 percent and 0.13 percent to 438.53 points, 128.80 points and 303.55 points respectively.