Buying stocks: Here are what analysts say

Abetter recession strategy is to invest in shares of well- managed companies that have low debt, good cash flow, and strong balance sheets. Truth be told that Nigeria’s stock market has suddenly become an attractive destination for many investors who are seeking high returns due to unattractive yields in the Fixed Income (FI) market.

When the market is soaring as it has done lately, it is easy to forget that what goes up can also come down.

Analysts speak

“We expect the market to extend the current gaining momentum in the early trading days of this week due to high system liquidity and attractive valuations. However, we envisage soft profit taking at the tail end of the week as investors begin to realign their portfolio ahead of the new year. Hence, we expect the market to close moderately positive,” GTI Research analysts said.

“We expect investors to continue to position in dividend paying stocks in the short term, given where yields are in the fixed income market, however, as seen at the start of the week, the possibility of profit taking cannot be overruled, hence a cautious trading strategy is recommended”, according to Lagosbased analysts at Vetiva Securities.

“While we anticipate profit-taking this week, we expect the equities market to extend the bullish streak with mild gains”, Afrinvest research analysts said in their recent note to investors.

“We expect mixed performance with a bearish bias in the equity market as investors book profits and hunt for bargains”, United Capital research analysts said.

Market in review

The Nigerian Stock Exchange (NSE) All-share Index and Market Capitalisation appreciated by 2.19percent to close the trading week ended November 27 at 34,885.51 points and N18.228 trillion respectively.

Similarly, all other indices finished higher with the exception of NSE CG, NSE Banking, NSEAFR Bank Value, NSE AFR Div Yield, NSE MERI Growth and NSE Consumer Goods which depreciated by 0.05percent, 1.31percent, 1.53percent , 0.38percent , 0.44percent and 0.5percent while the NSE ASEM Index closed flat.

27 stocks had advanced in price against 43 laggards

Twenty- seven ( 27) equities appreciated in price last week, higher than twenty-one (21) equities in the preceding week. Fortythree ( 43) equities depreciated in price, lower than fifty-five (55) equities in the preceding week, while ninety- one ( 91) equities remained unchanged, higher than eighty-five (85) recorded in the preceding week

The market recorded total turnover of 1.816 billion shares worth N25.791 billion exchanged in 31,665 deals, in contrast to a total of 11.400 billion shares valued at N35.892 billion that exchanged hands in preceding week in 39,265 deals.

The Financial Services Industry ( measured by volume) led the activity chart with 1.274 billion shares valued at N14.710 billion traded in 18,392 deals; thus contributing 70.15percent and 57.04percent to the total equity turnover volume and value respectively.

I t was f ollowed by the Conglomerates Industry with 217.170 million shares worth N231.809 million in 1,226 deals; and the Consumer Goods Industry, with a turnover of 113.760 million shares worth N2.598 billion in 4,568 deals.

Trading in top three equities namely Zenith Bank Plc, Transnational Corporation of Nigeria Plc and Access Bank Plc (measured by volume) accounted for 649.529 million shares worth N8.104 billion in 6,395 deals, contributing 35.76percent and 31.42 percent to the total equity turnover volume and value respectively