Researchers at Bancorp Securities Limited, one of Nigeria’s investment research and consulting services providers, have projected mild profit taking activities on the Nigerian Exchange this week as price correction, sentiment ceilings and a promulgation of risk averseness would possibly define the overall market sentiments.
The experts, in the firm’s ‘Weekly Stock Recommendation for Nov 6 – Nov 10, 2023’ publication circulated to our correspondent on Monday, noted that these were on the exception of stronger directional macroeconomic news, fundamental to the activities of the capital markets.
According to them, in view of the current situation in the local bourse, the Financial services sector is expected to pilot liquidity commencing trough the trade days of the week even as they projected that low cap stocks would remain undaunted in enhancing investors portfolio returns.
Also, the investment experts foresee that the Industrial and Consumer goods sector will return negative, on the back of enhanced divestment of risk averse investors in the near term, given the fundamental lags in the industry in its interaction with regulation and the broader macro-economy.
The Bancorp Securities’ analysts noted that the intrinsic value of the Naira improved week-on-week at the close of foreign exchange (FX) trading sessions last Friday, gaining 1.75% on the I&E window to close at NGN776.14/$1.
They pointed out that the performance underscored the significant positive externalities of the dollar leveraged facility that has helped to commence the reduction of the level of default by $6.7 billion on matured contracts to international suppliers.
In view of the development, the researchers projected that this may induce improved foreign portfolio investment inflow on the bourse, which reportedly declined to NGN0.11 trillion representing a fall by 31.9% Y/Y in September 2023.
In addition, they pointed out that the projected $2 billion Compressed Natural Gas (CNG) conversion facility to be situated in Lagos is geared to facilitate further an excess of $2 billion, directly enhancing the purchasing power of the naira in the near term.
