Blue- chips lead stock market’s rebound as index rises by 2.17%
DESPITE a prolonged downturn, improved corporate performance spurred activities on the equities sector of the Nigerian Stock Exchange ( NSE) as investors continue to analyse the fullyear numbers released so far and readjust their portfolios on the strength of sectoral performance.
Consequently, the NSE AllShare Index ( ASI) and market capitalisation appreciated by 2.17 per cent to close last week at 39,216.20 and N20.518 trillion respectively.
All other indices finished higher except NSE MERI Value and NSE sovereign bond indices, which declined by 1.54 per cent and 0.13 per cent. while the NSE ASEM, NSE AFR dividend yield and NSE growth indices closed flat.
Analysts argued that corporate performance has remained resilient in the face of the lingering macroeconomic headwinds even as quoted companies continue to churn out improved earnings, giving investors insight into how they should position ahead of year- end and the 2021 corporate actions.
The Chief Executive Officer of Investdata Consulting Limited, Ambrose Omordion said: "Strength returns to the market on the back of few earnings released so far.
"We think that the ongoing season helped by the unchanged interest rates, might support the new recovery move by the market.
"Investors seeking to preserve their capital and even profit from the ongoing recovery should play fundamentally sound stocks selling at a high margin of safety. This is the time to adopt value and growth investing.
"Money flow index revealed the entrance of the funds into equity space as corporate actions and high dividend yields continue to attract demand for blue- chip stocks and high cap equities in hot sectors with strong potential to grow sales in the current financial year."
Codros capital said, "With the MPC meeting now out of the way, we expect investors' attention to be focused on the bond auction results as they keep an eye on the movement of yields in the FI market.”
According to the analyst, as the full year 2020 earnings season gradually fades out, there are anticipations that sentiment would be influenced by developments in the macroeconomic landscape and corporate actions.