The Nigerian Stock market remained relatively impressive at W/W. In the previous week, the All-Share Index and Market Capitalization both appreciated by 5.30% to close the week at 28,415.31 and N14.852 trillion respectively.
Fourteen (14) equities depreciated in price, lower than fifteen (15) equities in the previous week. Ninety-six (96) equities remained unchanged, lower than one hundred and twelve (112) recorded in the previous week.
However, Profit-taking was noticed at the last trading session of the week as the plunge in money market rates, coupled with institutional investors re-strategizing ahead of the Q3 earnings results propelled buying interests of Nigerian Stocks, particularly NSE30 Stocks.
Stock traders and investors are trooping into the perceived undervalued local equity market amid the continual low-yields seen in Nigeria’s debt market.
Abiodun Keripe, Managing Director, Afrinvest Research in a note to Nairametrics spoke on his expectations for the coming week at Nigeria’s local bourse
While we expect the soft gains in the domestic market to be sustained, we note that investors are likely to extend the profit-taking activities into the week ahead.
- The year is gradually winding down and portfolio managers are looking to finish with a decent average performance for the year.
- Additionally, there is still the paucity of alternative assets with low valuation and the potential to outperform the low yielding fixed income instruments. I believe these are few drivers for the equities market which reinforces our positive outlook for the week.
- We expect the release of Q3 2020 earnings results from this week. With the not-too-underwhelming H1 numbers, we think the Q3 corporate performance will likewise be a positive catalyst.
On the global scene Stephen Innes, Chief Global Market Strategist at Axi in a note to Nairametrics spoke on expectation for the coming week, at the global equity market saying;
“Investors remain focused on the implications of a ‘Blue Wave’ election, given that the probability of a Democratic sweep has climbed to 60% from 47% one month ago,”
Furthermore, he opined;
- With much of the street thoroughly drenched in the Blue Wave, I would expect global drivers to reassert their influence with the path of the global economic recovery, COVID-19 case counts, progress towards a vaccine, and broader trade issues.
- The market remains zeroed-in on optimism, focusing on a likely pick-up in government spending, notably on infrastructure and ‘green’ initiatives. However, it requires one to ignore the prospect of higher corporate taxes and also potentially massive shifts in the regulatory backdrop for some sectors like tech.
- These elements point in vastly different directions for risk appetite, and I expect ‘risk-off’ to win out, in part, because of timing.
What to expect
Taking a cue from some market analysts who are slightly pessimistic about the coming week in the Nigerian bourse. Profit-taking is more likely to continue amid falling crude oil prices, and growing youth unrest over alleged police abuses.
