Investment researchers at Bancorp Securities Limited, a front-line investment research and consulting services firm in Nigeria, have predicted that trading sessions in the nation’s capital market this week would remain upbeat in view of the current macroeconomic factors shaping the trend of the economy.
The analysts, in the firm’s ‘Weekly Stock Recommendation Mar 11 – Mar 15, 2024’ circulated to our correspondent, projected that stemming from the preceding week, key macroeconomic factors expected to influence the market in the coming weeks include current efforts by the Federal government to address food inflation as a measure to curb core inflation, coupled with rate hikes aimed at limiting demand-driven inflation.
Also, another factor identified by them as having potential to affect the market is the IMF’s tacit concurrence with the recent interest rate hike by the Central Bank of Nigeria (CBN), whilst acknowledging positive developments in government revenue collection and oil production.
While recalling that there is a notable slowdown in private sector momentum, as indicated by the drop in the Stanbic IBTC Bank’s PMI from 54.5 to 51.0, the experts also saw the need to reshape the economy’s productive frontiers is underscored by the foreign trade in goods report, revealing a negative net export of goods in Q4 2023, with crude oil and oil-based exports dominating at 91.02% of total exports.
The researchers stated: “The key implication of the current situation is a proactive fiscal policy drive by the federal government, aligned with the 2024 national budget. This approach aims to stimulate crucial sectors in the real economy, fostering improved financial performance for companies.
“Anticipating this, we expect issuers in the domestic market to align their second-quarter operations accordingly. Investors are likely to seize the opportunity presented by low-priced stocks resulting from the recent bearish trend in the market, strategically adjusting their portfolios to maximize potential capital gains.
On the local bourse’s outlook this week, the firm’s investment researchers predicted: “In the upcoming week, we anticipate a continuation of bullish momentum in the stock market, particularly in key sectors.
“The expected price action suggests a bullish correction, driven by the anticipation of earnings results from issuers and positive corporate actions reflecting the full-year performance of 2023. With the repricing of higher-yielding fixed income assets posing a challenge, we anticipate an evenly distributed upward trend on the stock market”, they added.
