2021 Corporate Earnings To Dictate Stock Market Direction This Week

Nigerian stock trading, this week, would be guided by the release of 2021 corporate results and dividend declarations expected to hit the market.

The domestic stock market is expected to close positive this week, as more listed companies publish their audited 2021 full year results and with the declaration of their dividend payouts.

Analysts’ Optimism

Analysts at Cowry Assets Management Limited are expecting the equities market to be bullish as corporates that opted for 60 days filing option have started releasing their audited full year 2021 results with stimulating dividend payouts.

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Analysts at Cordros Securities Limited said: “this week, we expect the Nigerian Exchange (NGX) floor to be flooded with corporate earnings as more companies publish their audited 2021 full year numbers, accompanied by dividend declarations.

“We believe this would provide a catalyst for buying activities even as risk-averse investors are likely to remain cautious due to medium-term expectations of an uptick in fixed income (FI) yields.  Overall, we advise investors to seek trading opportunities in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.”

To Afrinvest Limited,  “this week, we anticipate that bargain purchase activities would drive a modest positive performance in the market.”

Last Week’s Trading Activities

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Last week was a keenly contested battle between the bulls and the bears as mixed sentiments dominated trading activities on the local bourse.

Pertinently, the All-Share Index fell marginally week-on-week (W-o-W) by 0.13 per cent to close at 47,140.48 points. Similarly, the market capitalisation shed N29 billion W-o-W to close at N25.406 trillion. Notably, profit-taking in SEPLAT Energy, Guaranty Trust Holding Company (GTCO), Access Bank, Airtel Africa and Dangote Cement drove the weekly loss.

Performance across sectors was mixed; the NGX Banking, NGX Oil & Gas and the NGX Industrial indices fell by 0.74 per cent, 3.45 per cent and 0.32 per cent respectively to close at 450.09 points, 409.32 points and 2,131.36 points respectively. However, NGX Insurance index and NGX Consumer Goods index rose by 1.05 per cent and 2.35 per cent to 187.80 points and 592.59 points respectively.

However, market breadth for the week was positive as 43 equities appreciated in price, 38 equities depreciated in price, while 75 equities remained unchanged. RT Briscoe led the gainers table by 53.85 per cent to close at 60 kobo, per share. Learn Africa followed with a gain of 46.67 per cent to close at N2.20, while SCOA Nigeria went up by 32.02 per cent to close to N2.35, per share.

On the other side, CWG Plc led the decliners table by 9.76 per cent to close at N1.11, per share. Berger Paints followed with a loss of 9.58 per cent to close at N7.55, while Nigerian Exchange Group (NGXGroup) declined by 8.49 per cent to close at N24.25, per share.

Overall, a total turnover of 1.713 billion shares worth N30.764 billion in 24,767 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 1.331 billion shares valued at N22.700 billion that exchanged hands previous week in 27,822 deals.

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The Financial Services Industry (measured by volume) led the activity chart with 1.064 billion shares valued at N12.201 billion traded in 11,708 deals; contributing 62.14 per cent and 39.66 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 156.077 million shares worth N5.004 billion in 4,877 deals, while the Conglomerates Industry traded a turnover of 113.554 million shares worth N309.833 million in 1,062 deals.

Trading in the top three equities; Access Bank Plc, Guaranty Trust Holding Company and Fidelity Bank (measured by volume) accounted for 500.778 million shares worth N7.455 billion in 3,603 deals, contributing 29.23 per cent and 24.23 per cent to the total equity turnover volume and value respectively.

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