…Analysts Urge Investors To Target Stocks With Good Fundamentals
After days of bearish momentum of its trading sessions, the Nigerian equities market rebounded on Wednesday as the All Share Index (NGX-ASI) grew by 0.48%, closing at 98,174.99.
The positive trend lifted the year-to-date (YTD) performance of the bourse to 31.30%, with market capitalization increasing by NGN286.3 billion to settle at NGN59.51 trillion, just as the TRIN improved slightly to 0.06x (from 0.03x), indicating that the market remains positive.
According to a Note from Bancorp Securities Limited on the day’s trading trend, the ASI gain was driven by price appreciation in high-cap stocks such as SEPLAT (+7.55%), WAPCO (+7.56%), ACCESSCORP (+2.08%), and UBA (+0.15%), among others.
The firm also noted that renewed interest was noticeable in GOLDBREW, which topped the gainers’ chart for the second consecutive session, gaining 9.86% to close at NGN4.47; followed by THOMASWY (+9.83%) and FTNCOCOA (+9.50%). On the flip side, profit-taking activities weighed on SUNUASSURANCE (-9.85%), LEARNAFRICA (-9.85%), and HMCALL (-9.85%).
However, analysts in the firm observed that investors maintained a cautious stance on Consumer Goods stocks, with the sector emerging as the worst performer for the day, declining by 0.17% due to losses in PZ (-8.71%) and VITAFORM (-5.50%).
Similarly, the Note reflected that the Banking index also dipped slightly by 0.07%, reflecting profit-taking in WEMABANK (-4.60%), ZENITHBANK (-0.56%), and STERLINGNG (-7.16%).
The Oil and Gas index led the day’s performance with a gain of 3.16%, driven by gains in SEPLAT (+7.55%), ETERNA (+3.08%), and JAPAULGOLD (+0.46%), and Insurance and Industrial indices followed, appreciating by 1.60% and 0.81%, respectively.
The analysts further clarified: “From our technical sentiment; the market breadth returned 2.00x an improvement from the 1.26x with 42 advancers outperforming 21 decliners. This positive sentiment was further reinforced by a robust UD volume ratio of 5.60x, highlighting significantly higher traded volumes in advancing stocks compared to decliners. Notably, the top five most traded stocks by volume all closed on a positive note, reflecting growing optimism among market participants, buoyed by increased liquidity inflows.
“The NGX-ASI continues to trade above its 7-day and 20-day moving averages, signalling short-term bullish momentum and potential stabilization. However, a breakout above the 50-day moving average remains crucial to confirm a sustainable upward trend”, they added.
Based on the day’s trading indices, the investment researchers implored the “investors to continue trading in stocks with good fundamentals as the market shows signs of resilience and potential profit opportunities in the near term.”
