Investment analysts at Bancorp Securities Limited, one of Nigeria’s investment research and services providers, have predicted cautious sentiment among investors pervading the nation’s equities market this week as the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) will meet next week.
The researchers made this projection in the firm’s ‘Weekly Stock Recommendations May 8 – May 12 2023’, recalling that the equities market sustained bullish momentum last week, albeit at a slower rate
They noted that last week, the Nigerian bourse closed with the NGX ASI gaining 0.12% WoW, after a slow momentum week start as the sell-off of TRANSCORP shares in negotiated deals was among the issues that impacted on the ASI at the end of the trading sessions.
During the week under review, the Bancorp Securities’ analysts recalled that the NGX ASI and market capitalization were up by 52,465.31 basis points and N28.57 trillion respectively.
According to them, the trading sessions closed up with the Banking sector leading the performance charts with a 5.23% return WoW, wherein WEMABANK, ACCESSCORP and STERLINGNG returned 16.58%, 10.84% and 8.12% respectively, amongst others.
The report further reflected that the Insurance sector gained 3.08% as well based on the performances of ROYALEX (8.93%), PRESTIGE (8.33%) and REGALINS (6.90%) just as the Oil and Gas, Consumer goods and the Industrial goods indexes returned a WoW premium of 5.08%, 0.02% and 0.09% respectively.
On the market’s outlook this week, the analysts predicted: “The last few trade days have been predominated by bullish sentiments; however, as already observed the momentum is slowing down, primarily due to anticipation of the next move by the CBN as it relates to the MPR in its forthcoming MPC meeting scheduled for May 15, 2023.
“We expect the market to trade in a range during the week, as we await further directional news in coming weeks”, they added.
On stocks recommended for investors, the experts recommended LAFARGE and NESTLE as stocks with potential good returns for investors while they recommended a hold on NIGERIAN BREWERIES’ investment.
They clarified their position on the NIGERIAN BREWERIES thus: “NB brands have proven overtime to be market leaders in its real markets, the Industry’s positive correlation with Foreign exchange anomalies in Nigeria and the purchasing power of the populace has hit a huge albeit temporary blow on the returns of this company
“We, however, expect that once macroeconomic environment is stabilized enough as it relates to inflation and foreign exchange, this stock is low enough for a good entry point, hence our HOLD recommendation”, the experts added.
