Market Report

Stock investors in cautious stance amid Q3 earnings season

by Iheanyi Nwachukwu

October 20, 2016 | 12:52 am
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Nigerian stock buyers have assumed cautious positions at the nation’s bourse despite prospects of third-quarter (Q3) earnings season going full gear.

With Q3 earnings season opening up further, many investment analysts had expected buy side activities to pick-up as investors position ahead of the numbers.

But in defying the positive sentiment, the stock market recorded negative trades in the early trading days of this week, with more sale orders without a corresponding demand.

The week started quiet with few trades done and steep sell-off in banking and consumer goods stocks, market watchers noted. The market slipped further into the week as investors maintained cautious stance in the equity space.

“With focus now squarely on nine month 2016 earnings report, we believe the current sell-off is driven largely by the negative economic headlines and Moody’s report that top five Nigerian banks may face credit challenges”, said research analysts at Lagos-based investment house, Dunn Loren Merrifield.

The National Bureau of Statistics (NBS) last week released the inflation rate for the month of September 2016 which shows an increase to 17.9% year-on-year from 17.6% recorded in August.

Meristem research analysts had attributed the market performance last week to a mix of bargain hunting and profit-taking activities by investors; nothing that they expect influx of corporate scorecards for Q3’2016 to dictate the general market mood.

United Capital analysts anticipate investor sentiment to be mostly driven by expectations around Q3-16 earnings releases “which will likely dictate choppy trading patterns with the ASI likely to remain bound within a tight range.”

Last week, investors were slightly positive about Nigerian stocks as the NSE All-Share Index and Market Capitalisation appreciated by 0.09% to close the review week at 27,861.03 points and N9.570 trillion respectively.

In the trading week to October 14, all other Indices finished higher with the exception of the NSE-Main Board, NSE Insurance, NSE Lotus II and the NSE Industrial Goods Indices that declined by 0.21percent, 0.55percent, 1.15percent and 3.59percent respectively, while the NSE ASeM Index closed flat.

Twenty-two equities appreciated in price last week, same as twenty-two (22) equities in the preceding week.

Forty-two (42) equities depreciated in price, higher than thirty-five (35) equities in the preceding week, while one hundred and sixteen (116) equities remained unchanged lower than one hundred and twenty-three (123) equities recorded in the preceding week.

Iheanyi Nwachukwu

by Iheanyi Nwachukwu

October 20, 2016 | 12:52 am
  |     |     |   Start Conversation

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