By Nkiruka Nnorom Nigerian Stock Exchange Despite the strong buy sentiment demonstrated by investors last week that saw the local bourse...
By Nkiruka Nnorom
Despite the strong buy sentiment demonstrated by investors last week that saw the local bourse soar by 7.2 percent, equity dealers have said that investors should trade cautiously in the face of the on-going Coronavirus (COVID-19) economic impact.
They opined that the outstanding performance last week was surprising given the rising cases of Covid-19 in the country.
Last week, the National Centre for Disease Control (NCDC) announced 137 new cases of the virus, bringing the total number of confirmed cases to 442 as at close of business on Friday, April 17, 2020.
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Financial Vanguard’s analysis of trading activities on the Nigerian Stock Exchange (NSE) showed that the domestic equities market recorded positive returns in all the four trading days of last week after the Easter Monday public holiday with the benchmark All Share Index (ASI) rising by 7.2 percent to settle at 22,921.59 points from 21,384.03 points. The performance was driven by investors’ interest in bellwether stocks including Dangote Cement Plc, MTN Nigeria Communication Plc and Nestle Nigeria Plc.
But market operators indicated that they were basically taking advantage of the low stock prices, a situation which points to imminent profit taking.
Analysis of the week’s trading showed that Dangote Cement rose by 16.2 percent, while MTN and Nestle were up 6.8 percent and 16.5 percent respectively.
Accordingly, the Month-to-Date (MtD) returns increased to +8.6 percent, while the Year-to-Date (YtD) loss moderated to -14.6 percent.
Similarly, the equities market capitalization rose by N802 billion to N11.946 trillion from N11.144 trillion, representing 7.0 percent increase.
Also, sectoral performance was positive as all the sectors gained. The consumer goods sectors led others with 15.6 percent increase as Nestle (+16.5%) and Nigerian Breweries Plc (+45.7%) recorded significant increases.
The industrial goods (+5.2%), banking (+4.7%), oil & gas (+1.5%) and the insurance (+0.8%) sectors followed suit.
However, analysts at Cordros Capital, a Lagos-based investment banking firm, described the performance as surprising, saying: “This week’s performance was surprising, given that risks remain on the horizon following the increasing number of COVID-19 cases in Nigeria. Nonetheless, we note that the market performance was buoyed by fundamentally justified stocks and therefore advise again, that investors trade cautiously.”
The post EQUITY INVESTMENTS: Dealers call for caution despite positive close appeared first on Vanguard News.
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