While the local bourse reversed the gains from the previous week as the All-Share Index, ASI fell by 1.1% Week on Week, W/W to close at 67,395.74 points, the banking sector on the Nigerian Exchange Limited has demonstrated its resilience.
According to Vanguard, more first-tier banks have graced the market with their impressive half-year earnings reports.
The outstanding results of UBA and Zenith Bank have supported increases in interim dividend payouts of 150% and 66.67%, respectively.
Analysts have said that these have provided market participants with information on what to anticipate by the end of the year. “As a result, it is critical that we trade and invest prudently in advance of the occasions and variables that will influence the market in this year’s final quarter.
“Investors are placing their bets on the half-year results from Accesscorp, AXA Mansard, and Consolidated Hallmark Insurance as well as interim dividends as the third quarter earnings reporting season comes to a close.”
The bad performance last week was caused by profit-taking in several companies, including Zenith Bank, which fell by 10.0%, Guaranty Trust GTCO, which fell by 8.1%, Dangote Sugar, which fell by 10.8%, and MTN Nigeria, which fell by 1.5%, according to a review of the trade last week.
As a result, the gains for the Month-to-Date and Year-to-Date periods were +1.3% and +31.5%, respectively.
Regarding activity levels, the overall trade volume and value rose by 10.9% W/W and 4.4% W/W, respectively.
The Banking Index fell by 3.2%, the Oil & Gas Index by 2.0%, the Consumer Goods Index by 1.8%, the Industrial Goods Index by 0.3%, and the Insurance Index by 0.5%, making it the only sector to perform better.
“We predict cautious trading on the stock exchange next week in the absence of any favorable triggers to increase investors’ demand for risky assets,” according to Cordros Research commenting experts.
“Overall, we believe that investors should look for trade opportunities in fundamentally good equities because the negative macroeconomic environment continues to be a big headwind for corporate earnings.”
Analysts at Investdata Consulting Limited commented on the market’s outlook, saying: “We expect mixed sentiments and a slowdown in the rate of selloffs on bargain hunting ahead of the release of Accesscorp’s half-year earnings reports and the interim dividend from Chi Plc and Mansard in the middle of portfolio rebalancing for quarter end and continued sector rotation.
“However, as additional policy announcements and economic managers go to work, pullbacks are presenting buying chances amid government economic changes, which is likely to eventually provide investing direction.”