Hopes rise on improved corporate earnings as index climbs 0.4%

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.”