Based on the prevailing macroeconomic factors in the broad economy, investment researchers at Bancorp Securities Limited, one of the leading investment research and consultancy services firms in the country, have predicted that the Nigerian equities market would maintain a steady outlook this week.
The experts hinged the forecast on previous week’s positive sentiment driven by the slight increase in the NGX ASI and market capitalization, despite a significant drop in trading volume indicating investor caution.
In the firm’s ‘Weekly Stock Recommendation: Nov. 18 – Nov. 22, 2024’ sourced by our correspondent on Monday, the analysts projected that stocks in sectors like retail, consumer goods, and technology (e.g., JOHNHOLT, EUNISELL, TANTALIZERS) may continue to outperform, while energy and financial stocks (e.g., OANDO, VFDGROUP) could face challenges if earnings disappoint or sector-specific issues arise.
According to the experts, during the week macroeconomic factors such as inflation, exchange rate stability, and fiscal policies, including the Medium-Term Expenditure Framework for 2025-2027, will significantly impact investor sentiment, with potential positive effects if the Central Bank of Nigeria (CBN) addresses inflation or currency stability.
In addition, they pointed out that fluctuations in global oil prices and concerns over the government’s N13.8 trillion borrowing plan may influence market sentiment, especially if there are signs of fiscal strain.
On liquidity and investor participation in the local bourse this week, the researchers projected that “the market will likely remain cautious with low trading volumes, as institutional investors focus on large-cap stocks like ACCESSCORP, UCAP, and UBA, limiting liquidity in mid-and small-cap stocks.
Based on this, they predicted that this could result in a continued consolidation phase, with market indices showing minor fluctuations while investors await clearer macroeconomic signals.
