Equity researchers have said that the stock market will continue on a positive trajectory this week after six weeks of consecutive negative performance was halted following repositioning by investors in anticipation of dividend declaration by corporates.
Financial Vanguard’s analysis of the week’s transactions shows that the equities market capitalization rose to N56.323 trillion during the week from N55.512 trillion in the previous week, indicating a 1.45 percent increase as corporates continue to publish their impressive first quarter (Q1) earnings releases and the commencement of the dividend earnings season.
The benchmark All Share Index (ASI) rose by the same margin to 99,587.25 points as a result of renewed interest in banking stocks and other blue chip companies with strong fundamentals.
Particularly, investors’ interest in FBN Holdings Plc (32 7%), Guaranty Trust Company (GTCo) Plc (16.1%), United Bank for Africa (UBA) Plc (12.1%) and MTN Communication Nigeria Plc (6.4%) drove the positive market sentiment.
Sectoral analysis shows that trading was mixed as the banking and insurance sectors advanced by 9.4 percent and 1.0 percent respectively, while the oil & gas, industrial goods and the consumer goods sectors declined by 0.7 percent, 0.4 percent and 0.3 percent respectively.
Trading activity was also mixed with the volume of traded shares advancing by 5.6 percent Week-on-Week (WoW) to 1.94 billion units, while traded value fell by 4.7 percwbt WoW to N32.64 billion.
Looking ahead, analysts at Cowry Asset Management said they anticipate that positive trend would persist in the back of anticipated dividend declarations.
They said: “Our outlook stays positive as we anticipates the current trend of gains in the market to continue, driven by the commencement of the dividend earning season as corporates announce dividend qualification dates.
“Also, with the gradually seeming uncertain outlook for the alternative investment market where yields are expected to tank paltrily, there exist entry opportunities emerging in the equities space due to the gradual recovery of the market.”
Speaking in the same vein, analysts at Cordros Capital said: “We expect investors to adjust their portfolios based on assessment of Q1’24 corporate earnings reports.
“However, the prospect of higher fixed income yields could dampen buying interests, especially in the absence of any significant positive catalysts.”
