Economists and investment researchers at Bancorp Securities Limited, one of Nigeria’s stock broking and investment consulting firms, have projected that trading in the Nigerian Exchange this week would bullish with the attendant implications for positive returns to investors.
The researchers, in the firm’s ‘Weekly Stock Recommendations for Jan 27 – Feb 01, 2025’ circulated to our correspondent today pointed out that as investors adjust their portfolios ahead of full-year earnings, coupled with the release of early Q4 results, they expected the equities market to maintain its positive momentum.
According to the analysts, the firm’s optimism is driven by impressive corporate performance and strong liquidity in the financial services sector.
They, however, maintained that at the start of the week, market attention would likely to shift towards the Federal Government bond auction scheduled for Monday.
On the Market’s performance last week, the experts recalled that Nigerian equities market rebounded from the previous trading week’s losses, supported by increased liquidity in the banking and industrial sectors. As a result, the NGX All-Share Index (NGX-ASI) gained 1.22%, closing at 103,598.30 points, and year-to-date (YTD) performance improved to 0.65%.
Similarly, they noted that Market capitalization also recorded a significant increase of NGN794.2 billion, settling at NGN63.6 trillion, partly linking the growth to LASACO’s listing of new shares following its private placement transaction, which was included in the NGX daily official list.
Also, the firm’s investment experts observed that mixed sentiment dominated trading metrics, with both volume and value appreciating, while the total number of deals declined with a total of 3.05 billion shares were exchanged (+35.70% WTD), valued at NGN75.23 billion (+27.88% WTD) across 59,036 deals (-7.25% WTD).
On the macroeconomic outlook and implications for the economy and markets, the researchers projected that rising debt levels, declining revenues, and naira depreciation increase fiscal pressures limit public spending capacity, and dampen investor confidence, especially in infrastructure-dependent sectors.
According to the Bancorp Securities’ experts, this could lead to reduced foreign and domestic investments, negatively impacting economic growth just as elevated debt servicing and VAT hikes may drive inflation, reducing disposable incomes and consumer spending, and businesses relying on consumer demand could see lower earnings and stock valuations, further pressuring market stability.