Renewed appetite in bellwethers lift NSE’S indices by 0.67 per cent

.. Analysts predict gloomy outlook, blame speculations on fresh COVID- 19 outbreak

DESPITE the one- day public holiday declared by the Federal Government to commemorate Democracy Day, investors renewed appetite in bellwether stocks buoyed transactions at the Nigerian Stock Exchange ( NSE) last week, as the NSE AllShare index, and market capitalisation both appreciated by 0.67 per cent to close the week at 25,182.67, and N13.137trillion, respectively.

All other indices finished higher with the exception of NSE MERI Growth, NSE Consumer Goods, and NSE Oil/ Gas Indices, which depreciated by 0.07 per cent, 0.20 per cent, and 2.62 per cent respectively, while NSE ASEM closed flat

But analysts at the weekend predicted gloomy outlook, citing possible impact of the second wave of the coronavirus.

For instance, analysts at Vetiva Dealing and Brokerage, said: “With speculations around the possible impact of the second wave of the coronavirus hitting countries around the world, as well as the decline in prices of crude oil due to weak demand, we expect some level of jittery and negative reaction at the start of next week. Barring any positive event that is capable of uplifting sentiment.”

Codros Capital Limited, said: “In our opinion, risks remain on the horizon due to a combination of the increasing number of COVID- 19 cases in Nigeria and weak economic conditions. Thus, we continue to advise investors to trade cautiously and seek trading opportunities in only fundamentally justified stocks.”

The Chief Executive Officer, Investdata Consulting Limited, Ambrose Omordion, said: “The mixed trend is likely to continue, MACD crossing down the signal line to bearish region indicates pullback or sell down. This also implies that opportunities are still available as sectorial rotation continues ahead of the Q2 earnings reports start hitting the market.

“Also, sectors that have suffered oversold, so far, offer attractive risk- reward buyopportunities and outlook for consideration ahead of the Q2 economic and corporate data.”

However, he argued that the current undervalued state of the market offers opportunities to position for the short, medium and long- term, urging investors to sound and dividend- paying stocks for possible capital appreciation going forward.

A breakdown of activities last week showed that investors’ appetite in bellwethers lifted transactions on Monday, causing market capitalisation to appreciate N122billion.

Specifically, the All- Share Index ( ASI) increased by 233.66 absolute points or 0.93 per cent to close at 25,249.96 points, while investors gained

N122billion as market capitalisation increased to N13.172trillion.

The uptrend was impacted by gains recorded in large and medium value stocks, amongst which were; MTN Nigerian Communications ( MTNN), BUA Cement, Nigerian Breweries, UAC of Nigeria ( UACN), and Vitafoam Nigeria.

Sustained bargain- hunting in most blue- chip stocks also buoyed transactions on Tuesday, as market capitalisation increased further by

N44billion.

At the close of trading, ASI rose by 85.19 absolute points, a 0.34 per cent gain to close at 25,335.15 points, and market capitalisation gained N44billion to close at N13.216trillion.

The uptrend was impacted by gains recorded in large and medium sized stocks like BUA Cement, BOC Gases Nigeria, Dangote Sugar Refinery, Neimeth International Pharmaceuticals,

Prestige Assurance.

At the close of trading on and

Wednesday, the market reversed the gaining streak, following profit- taking by investors, causing ASI to slip 0.47 per cent or 120.11 absolute points to close at 25,215.04 points. The overall market capitalisation shed N62billion to close at N13.154trillion.

The downturn was impacted by losses recorded in medium and large value stocks, which included BUA Cement, UAC of Nigeria ( UACN), CI Leasing, Guinness Nigeria, and Zenith Bank.