Investment analysts at Bancorp Securities Limited, one of Nigeria’s investment research and consultancies, have predicted cautious trading in the nation’s equities market this week as investors try to explore stocks with promising return opportunities following some days of the market’s not-too-impressive performances.
The investment experts, in the firm’s ‘Weekly Stock Recommendations: Oct 24th–Oct 28th, 2022’ circulated to our correspondent on Monday, noted that the momentum in the domestic equities market last week was downbeat as selloff in the most capitalized stock – AIRTELAFRI (-27.1%) weighed on the benchmark index by 6.67% w/w below the 45,000 mark to 44,396.73 points.
They stated that following the lack-lustre performance due to waning investors’ sentiments, the market capitalization also declined by 6.67% w/w to N24.2 trillion as investors scale down their holdings in some high and medium-capitalized stocks.
As a result of the unimpressive performance, the experts pointed out that the market shed N1.1 trillion while the Year-To-Date (YTD) return took a steep decline to 3.93% from 11.36% in previous week.
Even then, they recalled that the level of trading activities closed strong w/w as the total traded volume advanced 91.43% w/w to 938.02 million units while the total traded value also improved by 40.10% w/w to N16.70 billion.
In addition, Bancorp Securities stated that the sectorial performance closed the week in the mix as the Industrial Goods Index (+3.22%) led the gainers’ chart as witnessed in previous week due to price appreciation in BUACEMENT, followed by Banking index which also gained by 1.15% w/w following price appreciation in GTCO , FIDELITYBK, and UNITYBNK.
On the contrary, the firm reported that Insurance (-3.72%) led the laggards for the week due to sell-off in NEM and AIICO. Similarly, price depreciation in TOTAL, MRS, NB and CHAMPION dragged the Oil & Gas (-1.45%), and Consumer Goods (-0.88%) indices lower.
The firm’s experts projected that this week they anticipated “cautious trading to keep the market muffled as investors seek opportunity to hedge against the lingering weak sentiment.”
Despite this forecast, the still recommended WAPCO, MTNN, ZENITH and GTCO as strong buy for investors following the recent performances of the stocks and the listed companies on key assessment criteria.
For instance, on GTCO, they stated: “We anticipate that the acquisition of non-bank companies will continue to boost shareholder value by exploiting cross-selling opportunities in its various operations”
Similarly, on ZENITH the investment researchers predicted: “We maintain a Buy recommendation on the stock with a target price target of N30.00 on the back of the decent H1 2022 results: stable asset quality; capital adequacy (CAR 21.0%) and sustainable long-term dividend policy.”
