As the domestic and foreign policies of the Federal government will characterize investment activities this week, investment researchers at Bancorp Securities Limited, a leading investment research and consulting services firm in Nigeria, has projected a bearish momentum in the nation’s equities market.
The analysts, who made this projection in the firm’s ‘Weekly Stock Recommendations: July 31 – August 4, 2023’ stated that they expected the National Economic Council (NEC) and relevant parastatals to make conclusive agreements, as to the major grievance around minimum wage of doctors and the alarming rate of labor mobility in the industry.
According to them, this is pertinent as Nigeria’s private sector health care, is not optimized to subsidize healthcare services cost and volume wise.
The experts pointed out that as chairman of the Economic Community of West African States (ECOWAS), President Tinubu imposed economic sanctions through placing border restriction on land and air spaces, around Niger Republic, adding that the consideration of using concerted military efforts to return normalcy may have adverse effects on exacerbating the rate on insecurity in the country.
This is even as they expressed concerns around a potential nationwide economic shutdown, due to an anticipated Wednesday, August 2, 2023 strike action by the Nigeria Labour Congress (NLC), barring standing court orders.
In view of the worrisome situation of the country’s politico-economic space, the experts predicted: “The Nigerian bourse is expected to sustain is bearish momentum, as investors flight to safety to fixed income assets with good fundamentals, this is precipitated by the hike in interest rates and its militating impacts on macroeconomic growth of the internal economy.
“Consumer goods sector stocks, is expected to decline further, whilst bearish momentum in the banking and insurance sectors is likely to lose steam”, the firm’s analysts added.
Meanwhile, they recalled that the NGX ended last week flattish, as the earlier week’s gain was overshadowed by negative sentiments following the MPC decisions and the extent of FX losses trailing some corporate results.
Specifically, the experts also noted that the ASI, the benchmark index, recorded 0.02% gain Week-on-Week (W-o-W) to take the index to 65,056.39 points and the YTD returning 26.94%, adding that the indexes under the firm’s coverage all closed bearish except the Oil and Gas which recorded 9.28% gain W-o-W.
