The Nigerian stock market experienced a slight increase last week, driven by MTN Nigeria Plc and other banking stocks.
Investors adjust investment portfolios
This trend occurred as investors adjusted their investment portfolios based on evaluations of certain companies’ H1’23 earnings reports.
The Nigeria Exchange Limited’s All-Share Index (ASI) saw a marginal 0.2% rise, closing at 65,325.37 points, up from 65,198.08 points the previous week.
The market capitalization of the NGX also grew by N93 billion, closing at N35.572 trillion compared to N35.479 trillion the week before.
Consequently, the Month-to-Date (MtD) and Year-to-Date (YtD) returns increased slightly to +1.5% and +27.5%, respectively. However, trading activity remained subdued, with trading volume and value dropping by 32.4% and 15.3% Week-on-Week (WoW), respectively.
In terms of sectors, the Banking Index and Insurance Index rose by 1.3% and 0.7%, respectively, while the Consumer Goods Index, Industrial Goods Index, and Oil and Gas Index declined by 0.9%, 0.4%, and 0.3%, respectively.
Analysts from Cordros Research commented that the market performance might remain mixed in the upcoming week as investors adjusted their portfolios based on H1’23 corporate earnings.
They expected positive sentiment to arise from earnings announcements of Tier-1 banks, particularly due to the anticipation of interim dividends.
Despite this, the analysts cautioned that the challenging macroeconomic environment could continue to impact corporate earnings.
Similarly, analysts at Investdata Consulting predicted a combination of positive and negative sentiments driven by bargain hunting, corporate earnings evaluations, and economic factors.
They highlighted the significance of selecting fundamentally strong and defensive stocks for investment amidst economic reforms and policy changes. The upcoming release of Q2 earnings reports and audited accounts could influence market dynamics and investor behavior.
