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Equities may sustain gains amidst portfolio repositioning

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By Nkiruka Nnorom

THE equities market will continue to trend up this week after recording a marginal increase of 0.30 percent.



Investment experts had projected that the market would shake off the negative sentiment that has prevailed in the stock market in the last couple of weeks following year-end portfolio realignment by investors.

Expectedly, investors enjoyed marginal gain during the weeks as the All Share Index, ASI, rose 0.30 percent to settle at 30,773.64 points, thus moderating the Month-to-Date (m/d) and Year-to-Date (y/d) losses to -0.33 percent and -19.53 percent respectively.

Similarly, the equities market capitalisation advanced by N33.66 billion to close at N11.24 trillion at the end of the week, a development market analysts attributed to  strong buying pressure across the market and the release of market sensitive information such as the Diamond-Access merger and the budget presentation, which drove performance.

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In their forecast, analysts at  Cowry Assets said the local bourse is expected to rise marginally again this week as investors, especially portfolio managers, hunt for undervalued stocks to cut down on their average prices or add new stocks to their portfolios cheaply.

Also, analysts at Cordros Capital opined that positive macro-economic fundamentals that capable of driving long term recovery still exist, but cautioned investors to tread cautiously despite of the gain in view of the brewing political jitters ahead 2019 elections, and the absence of a positive market trigger.

Breakdown of sectoral performance in the previous week showed positive returns across the consumer goods sector (+0.92%), industrial goods (+1.14%), insurance sector (+3.48%), and oil & gas sector (+2.26%). The banking sector emerged the lone loser, depreciating by 2.20 percent during the week.

According to analysts at Meristem Securities,  given the lower prices at which most heavily weighted stocks in the banking sector currently trade at, upbeat mood is expected to prevail in the sector this week.

On consumer goods sector, they said that following pockets of bargain hunting on many companies, profit-taking activities would drag the sector to a negative close this week.

Analysis of price movement showed that Diamond Bank topped the gainers chart within the week, rising by 57.89 percent on the back of its merger announcement with Access Bank Plc.

Unity Bank followed, appreciating 39.13 percent, while Neimeth Pharmaceuticals Plc, NEM Insurance and Forte Oil Plc advanced by 31.67 percent, 20.87 percent and 18.05 percent respectively.

On the flip side, UPDC REIT topped the decliners’ list, shedding 18.52 percent to close at N6.60, followed by Ikeja Hotels Plc, which fell by 9.63 percent and Japaul Oil and Maritime Plc, (-9.09%), Union Bank of Nigeria Plc declined by 8.20 percent, while Veritas Kapital was down by eight percent to close the list of top five losers.

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