Market to sustain tempo this week —Analysts

Financial analysts have said last week’s bullish trend in the country’s capital market will be sustained this week, all things being equal.

They, therefore, see the possibility for some improvements in the general performance of the market.

“We expect the equity market to take up slightly more bullish bets as earnings season gets into gear albeit with stints of profit taking following the past week’s rally,” analysts at Vetiva Capital Management Limited said in the firm’s weekend report.

The Nigerian Stock Exchange opened last week on a positive note, bolstered by weighty gains in the industrial goods sector as investors looked forward to the release of Dangote Cement Plc 2015 financial results.

The bourse maintained this bullish sentiment Tuesday through Wednesday last week, with all key sectors closing in the green following the eventual release of Dangote Cement results.

While the market extended gains on Thursday to close at a seven-week high, it stopped short of completing week-long gains, following muted performances across key sector on Friday. Overall the NSE All-Share Index climbed +657 basis points week-on-week with industrials (+20.99 per cent) outperforming other sectors.

Barring any Open Market Operation auction, analysts at Vetiva foresee modest demand in the Treasury bills market this week amid healthy investor appetite for low duration instrument.

However, they anticipate a relatively cautious trading pattern for bonds in the week ahead as market participants await the March bond auction circular (scheduled to be released this week).

Bearish sentiment remained dominant in the T-bills market at the start of the past week following the announcement of an OMO auction by the CBN. Tuesday through Wednesday last week, sentiment turned mixed with pockets of demand recorded on the short dated bills following the CBN’s twice a month auctions.

While pockets of demand were recorded on Thursday, sell pressure re-emerged at week close with yields across most maturities inching up. Meanwhile, the bond market also opened the last week on a bearish note.

In the same vein, analysts at Meristem Securities Limited, in their weekend report, anticipate an influx of earnings releases and dividend declarations in the coming week.

“We anticipate a soar in investor’s appetite. While we expect the market to sustain the current trend in the coming week, we opine that plausible profit taking on counters that gained in the week could stem positivity,” they maintained.

The Nigerian equities market, according to them, enjoyed bullish investor sentiments last week, as the NSEASI advanced on all five trading days of the week. Against this backdrop, the NSEASI advanced by 6.57 per cent week-on-week, pushing market capitalisation to N8.88tn.

The currency continued to trade range bound, depreciating 29kobo week-on-week to close at N199.28/dollar. Similarly, the currency remained relatively unchanged on the parallel market closing at N320/dollar.

On the global scene, while Asian and the United States markets reversed into negative territory at last week’s open, European markets opened on a positive note buoyed by advances in oil prices and mining stocks.

Tuesday through Wednesday last week, however, global markets closed mostly in the green as investors eyed continued rise in oil prices, increased Chinese liquidity and a better-than-expected ISM manufacturing report.

While European and the United States markets traded lower on Thursday last w eek, global markets climbed into positive territory at week close following the release of US February non-farm payroll data of 242,000 which came in higher than January equivalent while also beating market expectations.

Stanley Opara