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Stock Market

Expansionary monetary policy expected to support Nigerian, global stocks

Sixty (60) equities appreciated at price during the week, higher than fifty (50) equities in the previous week.

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Global stocks plunge over doubts of America's economic recovery

Nigerian stocks ended the previous week cumulatively on a bullish note.

The Nigerian All-Share Index and Market Capitalization appreciated by 2.63% to close the week at 41,176.14 and N21.530 trillion respectively.

Sixty (60) equities appreciated at price during the week, higher than fifty (50) equities in the previous week. Nineteen (19) equities depreciated in price, lower than twenty- one (21) equities in the previous week, while eighty-two (82) equities remained unchanged, lower than ninety (90) recorded in the previous week.

The uptrend was driven by price appreciation in medium capitalized stocks among which are; Japaul Gold & Ventures, Mutual Benefits, AXAMansard, Royal Exchange, Champion Breweries, all printing weekly gains of more than 30% amid strengthening fears that reveal the COVID-19 crisis seems to be getting out of hand in Nigeria’s key international markets including Western Europe and the United States.

READ: Nigerian Stocks start-up 2021 on gains from GTBank, WAPCO, Zenith Bank

What they are saying

Michael Nwakalor, a Macroeconomist at CardinalStone Research, in a note seen by Nairametrics, gave key vital insights on what might be in play at Nigerian Stock Market in the coming days.

  • “This week, we expect market players to continue to position for imminent dividend announcements with the release of full-year results in view. The continued dovish stance by the MPC in their first meeting of the year may also provide a tailwind for equities in the later sessions of the week.”

On the foreign scene, global stocks pared early losses on Monday as data confirmed the second world’s biggest economy China had impressive factory output report helping to offset recent disappointing news seen in America, showing a plunge in retail sales.

READ: Dangote Cement, Lafarge drag Industrial Index up by 2.84% to close the second week in green

Hotflex

In addition, Stephen Innes, Chief Global Market Strategist at Axi, in a note to Nairametrics, spoke on macros that will be very key for stock traders and investors in the coming week.

  • “We open the week to a noisy route-step beat of US national guards ring-fencing Capitol Hill. It’s hardly a festive backdrop to set the stage for a risk rebound into earnings season, especially with the latest unsavoury macro developments hanging like a dark cloud over markets.
  • “Still, US stocks remain close to all-time high levels. The fiscal and monetary policy mix remains exceptionally supportive and dips at this stage are getting consumed. The Fed will continue to be highly accommodating even if they taper in QE in 2021 as they are unlikely to hike Fed Funds until 2022 or beyond.
  • “The big questions remain as to what factors will take us higher over the short term in the face of the viral variants forcing politicians to lock down parts of the economy.”

READ: Stock traders await Nigeria’s big banks’ earnings

Bottom line

With the COVID-19 pandemic under control in China, factories and export-oriented companies have been operating much better than most other countries, allowing China to meet global demand. The ongoing lockdown measures in play in Europe and the US are likely to continue to spur demand for Chinese goods in the coming months.

Olumide Adesina is a France-born Nigerian. He is a Certified Investment Trader, with more than 15 years of working expertise in Investment trading. Message Olumide on Twitter @tokunboadesina. He is a Member of the Chartered Financial Analyst Society.

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Markets

Union Bank, LINKASSURE push NGX ASI into recovery

The market breadth closed positive with the bulls as LINKASSURE led 25 Gainers, and 16 Losers topped by NEM.

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Nigerian stock exchange market made a bullish recovery on the last day of the week’s trading session. This surge was bolstered by gains made by UBN and LINKASSURE amongst others. The All-Share Index increased by +0.21% to close at 39,198.75 from 39,114.73.

  • Nigerian Stock Exchange market value currently stands at N20.48 trillion. Its Year-to-Date (YTD) returns currently stand at -2.66%.
  • The market breadth closed positive with the bulls as LINKASSURE led 25 Gainers, and 16 Losers topped by NEM, showing a hint of consolation.

Top gainers

  1. LINKASSURE up +9.25% to close at N0.69
  2. JOHNHOLT up +9.26% to close at N59
  3. UBN up +9.09% to close at N5.40
  4. ROYALEX up +8.33% to close at N0.65
  5. CHIPLC up +8.33% to close at N0.39

Top losers

  1. NEM down -9.50% to close at N1.81
  2. COURTVILLE down -9.09% to close at N0.20
  3. SUNUASSUR down -8.47% to close at N0.54
  4. INITSPLC down -6.98% to close at N0.40
  5. ETERNA down -6.89% to close at N5.81

Outlook

The market recovered from a week-long loss as it posts profit at the end of the trading session.

  • Market sentiments tend toward bullish momentum as the NGX ASI closes with 25 Gainers and 16 losers.
  • Nairametrics however, advises cautious buying in this era of growing uncertainties.

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Markets

SEC plans to monitor foreign stock brokers in Nigeria

SEC is proposing tighter and stricter regulatory oversight and requirements for foreign stockbrokers in the country.

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Nigerian Stocks snap 7-year losing streak to post first gain in August

In an attempt to reduce the demand for foreign stocks in Nigeria, the Securities and Exchange Commission (SEC) is proposing tighter and stricter regulatory oversight and requirements for foreign stockbrokers in the country.

In an interview monitored by Nairametrics, the executive commissioner for operations of the SEC, Dayo Obisan revealed the commission was planning to actively monitor the local facilitators of foreign stocks.

“At least 400,000 Nigerians have invested in foreign stocks through brokers in the past 18 months,” Obisan said, with Nigerians actively trading or holding foreign equities now exceeding those investing in the local market and about 70% of these participants being less than 40 years of age.

This is despite the Nigerian Stock Exchange being dubbed the best performing last year after it gained 50% YTD. Stocks are however down 5% YTD.

In contrast, the S&P 500 Index is currently trading 14.50% YTD, creating a new all-time high.

Also, the value of transactions is down YTD as demand shifts from the Nigerian stock exchange market to the Cryptocurrency and foreign stock market.

“There is an increasing interest among the younger population and this is of concern to the commission primarily because it creates an avenue for exploitation,” Obisan said.

The SEC intends to license firms offering foreign stocks under a “digital sub-broker” regulation, which Obisan says should provide a form of clarity to their activities.

He also stated the requirement will ensure “regulatory responsibilities in on-boarding clients, custody of assets, and compliance with reporting requirements are met”.

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