Stock market sustains bullish sentiments
…As Aradel boosts capitalisation to N59.4trn
By Peter Egwuatu
The stock market sustained bullish sentiment last week following the listing of shares of Aradel Holdings Plc, which significantly pushed up the Nigerian Exchange Limited, NGX, market capitalisation to N59.425 trillion against N56.088 trillion recorded the previous week.
Specifically, Aradel Holdings added N3.1 trillion to the total market capitalisation of the NGX on Wednesday as it was listed on the Mainboard of the Exchange.
Meanwhile, the stock market grew by 0.5% as the major market index, NGX All Share Index, ASI, closed at 98070.28 points up from 97606.63 points the previous week.
Analysis showed that during the week under review, investors’ interest in Transpower push its price upward by 19.29% Week-on-Week, WoW, followed by GTCO 2.04% WoW and Trasnscorp Hotels 7.78% WoW to bolster the market’s performance.
There were selloffs in UBA, which went down by 4.15% WoW, Stanbic IBTC 1.84% WoW and Nestle 2.25% WoW.
Analysts further disclosed that the market reacted positively to some of the impressive Q3 financial results released so far which gave market players insights as to what they should expect by end of the current financial year.
Meanwhile, more corporate earnings reports are expected in the midst of pullbacks, portfolio rebalancing and sector rotation which have created opportunities for buying into valuable stocks at a time some sectors and industries performance are being influenced by policies of the government and various industry regulators.
Reacting to the market performance, analysts at InvestData Consulting said: “We cannot underestimate the capacity of earnings news and other factors that drive strength or weakness of any market are the different dynamics of stock markets technically which require effective strategies to navigate and follow trends profitably.
‘‘In the current phase of correction or pullbacks on the NGX, discerning investors and smart traders are repositioning their portfolios along sectors and companies with potentials to release positive numbers on the strength of their earnings power ahead of their September quarterly earnings reports.”
On market outlook, the analysts at InvestData stated: “We expect mixed sentiment to continue on positioning and profit taking ahead of more Q3 earnings reports. Also, sector rotation and portfolio rebalancing continues in the market, with investors taking advantage of pullbacks to buy into value. This is amid the volatility and pullbacks that add more strength to upside potential. ‘‘Consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.”
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