Hopes rise on im­proved cor­po­rate earn­ings as in­dex climbs 0.4%

The Guardian (Nigeria) - - BUSINESS - By Helen Oji

EX­PEC­TA­TIONS of im­proved cor­po­rate per­for­mance has con­tin­ued to spur ac­tiv­i­ties on the trad­ing floor of the Nige­rian Stock Ex­change (NSE), as more blue chip stocks con­sti­tuted the gainers’ chart yes­ter­day, re­sult­ing to a fur­ther rise in in­dex by 0.4 per cent.

Specif­i­cally, at the close of trad­ing yes­ter­day, mar­ket cap­i­tal­i­sa­tion of listed eq­ui­ties soared by N61­bil­lion from N15.882tril­lion recorded on Mon­day to N15.949tril­lion. Sim­i­larly, the All-share in­dex which mea­sures the per­for­mance of listed firms’ rose by 187.31 points or 0.4 per cent from 44,306.48 to 44,493.79.

An­a­lysts at In­vest­data Con­sult­ing Lim­ited, opined that with the ex­pec­ta­tions of more third quar­ter (Q3) numbers on the rally, the volatil­ity would con­tinue, while port­fo­lio reshuf­fling and repo­si­tion­ing for the ex­pected quar­terly and full year re­ports are un­der­way.

Specif­i­cally, the Chief Re­search Of­fi­cer of In­vest­data Con­sult­ing, Am­brose Omodion, said: “The re­newed buy­ing mar­ket as a re­sult of pos­i­tive sen­ti­ments was re­vealed by in­sti­tu­tional money flow in­dex that turned up after last Fri­day’s trad­ing ses­sion. This is as for­eign in­vestors con­tin­ued to po­si­tion in the na­tion’s eq­ui­ties to bal­ance their port­fo­lios based on the fron­tier MSCI in­dex as emerg­ing mar­kets re­main the at­trac­tion of for­eign fund man­agers.

“This is also due to the cur­rent low stock val­u­a­tions in an econ­omy that has re­cov­ered from re­ces­sion and al­ready on the growth path as re­flected in the con­tin­ued pos­i­tive eco­nomic data. How­ever, we would like to re­it­er­ate that in­vestors should go for eq­ui­ties with in­trin­sic value, es­pe­cially dur­ing this sea­son that div­i­dend pay­ment is ap­proach­ing.

“We ad­vise in vestors to al­low the numbers to guide their de­ci­sions, while repo­si­tion­ing for the rest of the year’s trad­ing ac­tiv­i­ties, es­pe­cially now that stock prices re­main volatile amidst im­prov­ing com­pany, eco­nomic and mar­ket fun­da­men­tals.

“It is time to com­bine fun­da­men­tals and tech­ni­cal tools to take de­ci­sion by know­ing the sup­port and re­sis­tant level to re­po­si­tion or exit any po­si­tion. Mar­ket is in phases; know the cy­cles in or­der to man­age y our trad­ing and in­vest­ing risk.”

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