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2021’s First Trading Week: Experts predict equity performance

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Equity Market

2021’s First Trading Week: Experts predict equity performance


 

As equity investors return to the trading floor of the Nigerian Stock Exchange (NSE) this morning to commence not just a new trading week but indeed another year, analysts in the market have predicted how equities will perform.

Recall that the market closed last week, the last trading week of 2020, strongly in the green territory with N778 billion profit, equivalent to 3.79 per cent growth in the benchmark index, the All-Share Index (ASI).

Consequently, the market will be going life today for the with market capitalization and the benchmark index standing at N21.057 trillion and 40,270.72 basis points respectively.

In their outlook report for this week, investment analysts at Cordros Capital Limited predicted continuous domination of the bulls in the market.

“In the first trading week of the new year, we expect the bulls to retain their dominance as buying activities due to positioning for full year 2020 dividends will likely suppress selling activities.

“However, we advise investors to take positions in only fundamentally justifiable stocks.”

Similarly, Investdata analysts expect the gaining streak to continue in the new year on buying interests in highly capitalized stocks that control 70 per cent of the market cap and pushed the NSE to rank the best performing market in the world last year.

The positive expectation is also anchored on relatively stable oil price rally in the global market as well as early signing of the 2021 budget by President Muhammadu Buhari.

“The NSE’s index action and indicators are looking up in the same direction on a very high traded volume and positive buying sentiments.

“Again, the current undervalued state of the market offers investors opportunities to position for the short, medium and long-term, which is why investors should target fundamentally sound, and dividend-paying stocks for possible capital appreciation in the rest of the year,” the analysts said in a report.

LAST WEEK RECAP

Meanwhile, last week was another brief trading week as the Federal Government of Nigeria declared Monday, 28th December, 2020 and Friday, 1st January, 2021 as Public Holidays to celebrate Boxing day and the New Year respectively.

At the end of the three-session week, a total turnover of 1.806 billion shares worth N25.966 billion in 14,634 deals were traded by investors on the floor of the Exchange,

This indicate 36.63 per cent and 35.59 per cent falls in volume and value traded  in contrast to a total of 2.756 billion shares valued at N40.311 billion that exchanged hands the penultimate week in 17,459 transactions.

Measured by volume, the financial services Industry, led the activity chart with 1.266 billion shares valued at N7.630 billion traded in 7,251 deals; thus contributing 70.07per cent and 29.38 per cent to the total equity turnover volume and value respectively.

The Oil and Gas Industry followed with 193.541 million shares worth N783.214 million in 1,093 deals, while the third place was consumer goods industry, with a turnover of 117.755 million shares worth N1.050 billion in 2,116 trades.

Trading in the top three equities namely AIICO Insurance Plc, Access Bank Plc and United Bank for Africa Plc (measured by volume) accounted for 763.173 million shares worth N3.029 billion in 1,764 deals, contributing 42.25 per cent and 11.67 per cent to the total equity turnover volume and value respectively.

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