Investment analysts at Bancorp Securities Limited, a leading investment and research consulting firm in Nigeria, have projected a positive outlook for Nigerian Exchange trading sessions this week as the Yuletide season approaches.
In the firm’s ‘Weekly Stock Recommendation: December 4 – December 8. 2023’ report circulated to our correspondent on Monday, the experts predicted that “with the festive season underway, the Nigerian bourse is expected to experience rebalancing of portfolios particularly, away from value stocks whose liquidity will ease quicker exchange due to the substitution of the speculative demand for money, versus the transaction demand for money, precipitated by inflation, particularly towards the end of the year.”
They noted that the stage had now been set for a more likely than not recapitalization exercise for commercial banks, and investors were observably taking positions early enough for prospective acquirers, who will benefit majorly from synergistic effects in the event of a share for share merger, and fundamentally strong targets, whose projected capital gain impact is expected to offer some buffer to its stagnated fair price.
In view of the latest recapitalization agenda for banks, the firm’s experts stated that in the current week, they expected the financial services sector to continue its precedence particular in volume of activities on the bourse, with a projected positive return on the banking index.
This is even as they stated that the health sector, mainly represented by investor interests in MECURE and NEIMETH, held the potential for price uptick in the current week.
The experts recalled that last week, the broad market was less intense, as the NGX All Share Index (ASI) closed positive, printing at 71,419.87 points, returning 0.27% w/w and 39.35% YTD with the recent delisting’s effected on the daily official list accounting for the 0.23% decline on market capitalization.
According to the investment researchers, the lack of impetus on the bourse was also evident on the 4.88% w/w change on the total volume traded during the week.
They linked the factors that moved the bourse during the course of the week as including, but not limited to, the consistent investor interests in UNIVINSURE, that made the stock to top the volume charts, accounting for 11.38% of the total volume traded on the bourse.
The firm’s report further clarified that the financial services sector stocks topped the volume traded ranks, during the week, accumulating a total 1.72 billion units traded – 67.68% of total volume traded on the bourse through the week and that the consistent premiums on growth stocks, with particular reference to MECURE and NNFM, which have featured in the weekly price gainers charts for three weeks consecutively.
