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Profit-taking may reduce gains this week — Analysts

By BusinessNews Staff on April 8, 2014

The equities section of the Nigerian Stock Exchange may not record significant rise this week, capital market analysts have said.

The analysts based the prediction on possible profit-taking by investors, who may want to cash in on the recent gains in stock prices.

According to them, with the significant profit garnered in the stock market within the last few days, it is only natural for the appetite of investors, who have waited for increase in prices of stocks, to be aroused.

They noted that this was already visible as the market had recorded pockets of profit-taking some weeks ago, with major market indicators closing lower.

Analysts from Vetiva Capital Market Limited noted in their report for the week ended April 4, 2014 that the gains recorded in the market last week, was not likely to be sustained as investors would take advantage of the significant price appreciation, especially in the shares of the multinational companies.

They said, “In continuation of the bullish run from the previous week, the NSE All-Share Index opened on an upbeat note, climbing 109 basis points as the financial services sector staged a comeback, riding on some impressive full year 2013 results.

“The index swung back to the positive, buoyed by financials as investor interest in tier-one banks remained strong. By week close, the equity market had recorded a week-on-week gain of 0.99 per cent.

“As the earnings season gradually wraps up, we are cautious about market direction in the sessions ahead, and anticipate the market will share same sentiment. Furthermore, we anticipate mild profit-taking in the week ahead, given the past week’s positive run.”

At the close of trading activities on Friday, the market capitalisation of the listed equities closed at N8.698tn, representing a rise by N7bn or 0.81 per cent from N8.628tn recorded at the beginning of the week.

The NSE All-Share Index also rose by 0.99 per cent or 380.98 basis points to close on Friday, at 38,712.76 points, up from 38,331.78 points recorded the previous week.

Similarly, the market capitalisation of the listed equities gained N121bn or 0.99 per cent from N12.313tn the preceding week, to N12.435tn last Friday.

In their report, analysts from FSDH Group, said, “The appreciation in the Index today could be attributed to the gains recorded in the share prices of some highly capitalised stocks such as: Nestle, Access Bank, Fidelity Bank, Transcorp and GT Bank amongst others.”

“We however caution investors to trade cautiously and ensure that they get expert opinion in their transactions. That being said, it is likely that the market would witness pockets of profit-taking this week.”

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