Investment analysts at Bancorp Securities Limited, a frontline investment research and consulting services company in Nigeria, have projected that trading in the Nigerian Exchange this week will sustain positive momentum.
The experts, in the firm’s ‘Weekly Stock Recommendation 23rd-27th June 2025’ Note circulated to our correspondent on Monday, hinged their forecast on the prevailing macroeconomic and other indices in the economy, especially as they related to monetary policies and inflation rate, among others.
The investment researchers forecasted: “We expect the market to retain a broadly positive tone this week, as investors continue to reposition around recent policy signals, particularly the CBN’s directive on forbearance-linked restrictions.
“Renewed interest in fundamentally strong banks, including those unaffected by the circular, is likely to drive selective buying, even where prices have recently pulled back.
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“Still, with signs of near-term fatigue in market breadth and volume dynamics, we anticipate a more cautious and rotational tone as half-year earnings positioning begins”, they added.
Reflecting on the local bourse’s performance last week, the researchers noted that equities market extended its bullish run for the fourth consecutive week, with the NGX All-Share Index (NGX-ASI) rising by 2.35% week-to-date (WTD) to close at 118,138.22 points, and consequently, the year-to-date (YTD) performance improved to 14.8%, up from 12.1% the prior week.
They noted that the gains were broadly driven by sustained buying interest across all sector indices, except industrial goods while the market capitalization rose by N1.75 trillion to settle at N74.53 trillion.
This is even as the equities market Up/Down Volume Ratio (UD Ratio) declined sharply to 0.85x, from 2.00x in the previous week, suggesting that despite market gains, more volume flowed into declining stocks than advancing ones, raising a mild caution flag about the strength of the rally.
Also, the TRIN (Arms Index) climbed to 1.25 from 0.75, reinforcing the caution. A TRIN value above 1 typically reflects increased volume in declining issues relative to advancing ones, implying that the rally may be losing momentum or becoming selective.
The analysts further clarified: “The slight divergence between the ASI and market cap percentage change is attributable to the listing of 6.65 billion ordinary shares of Sterling Financial Holdings Company Plc at NGN0.50 per share.
“Trading activity also reflected heightened investor interest. Total volume and value traded increased by 68.34% and 120.28%, respectively, to 3.46 billion units worth NGN112.4 billion, exchanged across 96,695 deals. Underlying technical indicators, however, reveal a slight divergence beneath the surface of the rally”, they added.
