NSE: downward trend to persist on development in polity

By Chioma Obinagwam

Although the Nigerian equities market closed in red in the previous week (week ended November 16, 2018), analysts are of the opinion that the trend would continue in the current week.

Precisely, analysts at Afrinvest limited, an independent investment banking firm with a focus on West Africa, noted that the persistent downward trend is hinged on the development in the country.

“Nevertheless, we expect the broad performance of the index to remain weak as investor sentiment remains pressured by developments in the polity,” Afrinvest predicted.

The polity has been replete with issues and events that threaten national security. The latest being the imposter narrative alleging that current president Muhammadu Buhari is ‘Jubrin’ or ‘Jubril’ Aminu  from Sudan; the upcoming general elections, filled with so much uncertainty; the recent killings in the northern part of the country among other issues seem to be sending shivers down the spines of investors and stakeholders of the market.

Hence, the inactions or actions of these investors to the happenings in the polity is having a negative effect on the market, would likely spillover beyond the week under review according to reports by the analysts.

A recap of the report from the Nigerian Stick Exchange (NSE) in the preceding week showed that the NSE All Share Index, a major stock market index which tracks the performance of all stocks listed on the NSE opened at 32,200.21 basis points (bps) and closed at 32,058.28 bps, down 0.44 percent.

More so, Year to date (Ytd), the index dropped 16.17 percent.
Similarly, Market Capitalisation of listed equities dipped by N51.8 billion to N11.7 trillion.

However, 24 equities appreciated in price during the week, lower than the 27 in the previous week. 36 equities depreciated in price, lower than 39 of the previous week, while 109 equities remained unchanged, higher than 103 equities recorded in the preceding week.

Analysts from the independent investment banking firm further posit increased buying activities by bellwethers locking in on the favourable stock prices.

” Despite the overall negative performance this week, we noticed increased buying activity in bellwethers and we expect this trend to be sustained in the coming week as investors seek to lock-in on the current attractive pricing in the market,” they stated.

Furthermore, Afrinvest Limited beams its searchlight on these equity watchlist for the week: United Bank for Africa (UBA), Guinness Nigeria Place, Custodian Investment Plc, Guaranty Trust Bank (GTBank) and Okomu Oil Palm.