Investment experts at Bancorp Securities Limited, one of the nation’s investment research and consulting services companies, have projected that the nation’s equities market will sustain its bullish trend with the financial services sector being the prime mover of the trading trend in the bourse this week.
The analysts made this forecast in the firm’s ‘Weekly Stock Recommendations Jun 19 – Jun 23, 2023’ on Monday as moves by the President Bola Ahmed Tinubu-led administration to create a more enabling environment for businesses in the country continue to gain momentum,
They recalled that the NGX ASI gained 5.49% week-on-week (W-o-W) at the close of trading sessions last Friday, thereby enhancing the performance of its YTD returns to settle at 15.12%.
In addition, the experts noted that during the week in review, the activity in the Financial Services, Oil & Gas and the Consumer Goods sectors, contributed 77%, 6% and 5% respectively to the volume of traded stocks while FTNCOCOA, UNITYBNK and WAPIC gained significantly with a 45.16%, 41.67% and 40.43% returns, on a W-o-W basis.
According to the firm’s Weekly Stock Recommendations report, the researchers attributed the positive performance of the equities market during the week primarily to fiscal and monetary reforms of the government, which ranged from the decentralization of electricity generation, to the free floating of the Naira in the foreign exchange markets, even further to, the impending educational reforms.
They clarified: “The equities market reverberated positive sentiments intra-week trade days. Noteworthy is the bourse’s reaction to the top to bottom reorganization of the CBN hierarchy, this received with much vigor at the beginning of the week., which witnessed a 2-day, 3.46% average growth in the NGXASI which later spiraled down, due to profit taking activities and partially the floating of the Naira which was announced at mid-week.
“A significant upside to the floating of the Naira, is that it stimulates economic activities in the internal economy, through inflow of FDI’s, efficient reallocation of resources and ceteris paribus, will aid the strengthening of the Naira, once other complementary policies are put in place”, the analysts added.
Specifically, the experts, in their forecast for the equities market this week, stated: “This week, we expect the financial services sector to be the usual primary mover in the markets, however, the consumer goods sector, and the beverages and brewer’s subsector, could be at good entry levels as we continue to monitor the market response to the current dynamism in the Nigerian economy.”
