Don't Miss

Equities may start week on negative note

By on May 26, 2015

Capital market analysts have suggested that the equities market may witness a slowdown in activities this week, with stocks opening the week on a negative note.

They, however, noted that the inauguration of Muhammadu Buhari as President might boost activities.

Analysts at Vetiva Capital said in their latest market commentary that, “Given sustained pressure across large cap stocks, we expect losses to extend into the start of the coming week though we see a potential for a boost to investor sentiment in anticipation of Nigeria’s upcoming May 29 presidential inauguration.

“With the tighter system liquidity and no expected inflows in the coming week, we anticipate the market will sell off as banks raise liquidity in adjustment to the new Cash Reserve Requirement regime.”

The analysts noted that the Nigerian equity market had opened the week higher on the strength of increased appetite for banking stocks, in particular the mid-tier banks.

They, however, observed that trading later turned bearish “as negative sentiments across the consumer and industrial goods sectors as well as waning demand for banking stocks steered the Nigerian Stock Exchange All-Share Index to four consecutive days of losses with the Index down 49 basis points week-on-week.”

On the poor performance of equities last week, analysts at Meristem Securities Limited said, “We attribute the recent lull in the market to the lack of market-driving news capable of spurring investor activities. However, we remain positive in our outlook for the coming week, as the new government gears up to take office.”

A total of 2.943 billion shares worth N16.045bn had been traded last week in 21,306 deals on the floor of the Exchange in contrast to a total of 1.626 billion shares valued at N14.426bn that exchanged hands the preceding week in 20,124 deals.

At the close of trading activities for the week on Friday, the NSE All-Share Index and market capitalisation depreciated by 0.49 per cent and 0.45 per cent to at 34,272.09 and N11.644tn, respectively.