Nigerian Stock Market Records Marginal Gains Amid Uncertainty.

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The Nigerian Exchange Limited (NGX) experienced a slowdown in trading activity last week, with the all-share index (ASI) edging up by 0.4% to 108,497.4. Market capitalisation added N95 billion to close at N67,614 trillion. However, the gains were marginal compared to the 1.4% week-on-week increase and N883.5 billion market cap boost recorded in the previous week.

The market slowdown was attributed to investors adopting a wait-and-see approach, assessing the potential impact of macroeconomic developments on portfolio positioning. “Investors are cautious, waiting to see how the rebased CPI data and the CBN’s rate pause will affect the market,” said analysts at Cowry Asset Management Limited.

Despite the index’s positive movement, trading activity remained weak. Market sentiment was largely negative, with total weekly traded volume dropping 17.1% to two billion units across 70,853 deals. The total trade value also declined by 10.9% to N49.89 billion, underscoring reduced participation.

Performance across key sectors was mixed, with three indices closing in the green and three in the red. The NGX Consumer Goods Index led gainers, surging 6.6% week-on-week, followed by the NGX Insurance Index (+1.47%) and the NGX Industrial Index (+0.05%). Gains in BUA Foods (+11.9%) and Dangote Sugar (+15%) drove the ASI, with month-to-date and year-to-date returns rising to +3.8% and +5.4%, respectively.

Analysts at Cordros Capital projected that market performance will be influenced by the upcoming Q4 2024 GDP report and further corporate earnings releases. “Investor sentiment will likely be shaped by macroeconomic trends and movements in the fixed-income market in the medium term,” they said.

Looking ahead, analysts at Cowry Asset Management Limited anticipate mixed market sentiment as investors digest corporate earnings releases and dividend announcements. “Investors will keep an eye on the rebased CPI data and the CBN’s rate pause, with potential fund inflows into equities as investors seek better opportunities,” they said. However, they advise caution, urging investors to focus on fundamentally strong stocks.

“Investors should be cautious and focus on stocks with strong fundamentals, good corporate governance, and a proven track record of performance,” said analysts at Cowry Asset Management Limited.

The analysts also noted that the market is expected to be driven by corporate earnings releases and dividend announcements in the coming weeks. “We expect the market to be driven by corporate earnings releases and dividend announcements, which will provide direction for investors,” they said.

Meanwhile, Cordros Capital projects that market performance will be influenced by the upcoming Q4 2024 GDP report and further corporate earnings releases. “Investor sentiment will likely be shaped by macroeconomic trends and movements in the fixed-income market in the medium term,” said analysts at Cordros Capital.

The analysts also noted that Dangote Cement, WAPCO, and BUA Cement are expected to unveil their 2024 audited financials this week. “We expect these companies to report strong earnings, driven by their dominant market positions and efficient operations,” they said.

In conclusion, the Nigerian stock market is expected to experience mixed sentiment in the coming weeks, driven by corporate earnings releases and dividend announcements. Investors are advised to focus on fundamentally strong stocks and to be cautious in their investment decisions.

“We advise investors to be cautious and to focus on stocks with strong fundamentals, good corporate governance, and a proven track record of performance,” said analysts at Cowry Asset Management Limited.

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