By Peter Egwuatu
Mixed sentiments and profit taking are likely to continue on the Nigerian Exchange Limited, NGX, as investors await more Tier-1 banks earnings for the half year 2023, H1’23, to make investment decisions.
Analysts who disclosed this believe that investors will hunt for attractive dividend-paying stocks amid the possibility of profit-taking activities on stocks that have recently experienced notable appreciation.
Meanwhile, trading on the Exchange last week closed positively as bargain hunting on Zenith, Dangote Sugar and BUA Foods leading to increase in their share prices by 7.4%, 6.0% and 5.4% respectively. As a result, the All-Share Index, ASI advanced by 0.9% higher to 68,143.34 points, pushing the Month-to-Date, MtD, and Year-to-Date, YtD, gains to 2.4% and 33.0%, respectively.
Similarly, activity levels were stronger, as trading volume and value grew by 5.3% Week-on-Week, WoW, and 38.5% WoW, respectively.
Sectoral performance was mixed as the Banking Index grew by 5.5% and Consumer Goods Index 2.2%, while the Insurance Index declined by 2.9%, Industrial Goods 0.5% and Oil and Gas Index 0.1%.
Commenting on the market performance, analysts at Cordros Research stated: “We anticipate mixed sentiments in the market as we believe investors will hunt for attractive dividend-paying stocks amid the possibility of profit-taking activities on stocks that have recently experienced notable appreciation.
”Notwithstanding, we reiterate that investors should seek trading opportunities in fundamentally sound stocks as the weak macroeconomic story remains a significant headwind to corporate earnings.”
On market outlook, analysts at Invest Data Consulting stated: “We expect mixed sentiment as bargain hunters hit the market ahead of the expected half-year earnings reports of UBA, Accesscorp and Zenith Bank in the midst portfolio reshuffling for quarter end and sector rotation.
”However, pullbacks are creating buying opportunities amidst the economic reforms of the government, just as more policy pronouncements and economic managers hit the ground running, a situation expected to offer investment direction eventually.
”We note that discerning investors have continued to target fundamentally sound companies and defensive stocks to protect their portfolios.
”Any pullback at this point may add more strength to upside potentials. As such, investors should take advantage of price rally to take profit, while also looking at the trends and events across the globe and domestically.”
Source: Vanguard