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The volatility in the Nigerian stock market continued last week with market recording a fourth consecutive week downturn following losses recorded by highly capitalised stocks across the sectors.
Analysts have emphasised that the volatility experienced last week were compounded by the global economic uncertainties, coupled with the political upheaval in Rivers State which had continued to put pressure on the stock market.
Meeanwhile, analysis of trading last week showed that BUA Cement’s stock price declined by -10.0% followed by Transcorp -7.8% and GTCO losing -4.6% to drive the Nigerian Exchange Limited , NGX , All-Share Index (ASI) lower by 0.9% Week on Week, W/W to close on Friday at 104,962.96 points from 105,955.13 points the previous week.
As a result, the Month-to-Date and Year-to-Date returns moderated to -2.7% and +2.0%, respectively.
Trading activity mirrored the broader market sentiment, as both volume and value fell by 12.1% W/W and 25.3% W/W respectively.
Similarly, sectoral performance was predominantly negative, with the Industrial Goods Index declining by -3.4%, Insurance Index -2.9% , Banking Index -2.6%, and Oil & Gas -1.1% , while the Consumer Goods Index up by 0.1%
Commenting on market outlook, analysts at Cordros Research stated: “In the coming week, we anticipate continued market volatility as investors analyse a slew of audited earnings reports and associated dividend announcements set to be released during the week”.
Commenting on market performance, analysts at InvestData Consulting Limited, said: “The global economic uncertainty and other local concerns in the events that are unfolding in Rivers State are affecting investor confidence, which had continued to put pressure on the stock market, even with rates in the fixed income market inched higher. In all this, NGX pullbacks or corrections are creating new entry opportunities for discerning investors and smart traders to position in value stocks ahead of influx of corporate earnings and end of the quarter window dressing by fund managers and other market operators”.
On market outlook, the analysts stated: “We expect mixed sentiment on bargain hunting, even as market players digest Treasury bill, TB, auction rates in the midst of profit taking, portfolio reshuffling and digesting of corporate action/ Q1 earnings forecast, as more earnings are expected to hit the market with dividend announcement”.
[Vanguard]