Portfolio rebalancing on the Nigerian Exchange Limited, NGX, continued on the back of expected corporate earnings inflows and dividend announcement.
This is ahead of the 2023 first quarter, Q1’23, earnings reports and price adjustments of many companies for dividend in view of their payment dates.
Meanwhile, investors’ eyes are still on companies that are yet to release their 2022 audited financial results ahead of the March 31, 2023 official deadline, especially the banks.
Analysts stated that the increasing dividend yields and low market price to earnings ratio provides better opportunities for discerning investors to hedge against inflation even when fixed income market yields look mixed.
But analysis of market transactions last week showed that negative sentiments persisted on the domestic bourse for the second consecutive week as the NGX All-Share Index, ASI dipped by 0.1% to close at 54,892.53 points. Pertinently, losses on BUA Cement by 1.6%and Stanbic IBTC 5.8% undermined the market’s performance.
Thus, the Month-to-Date, MtD, and Year-to-Date, YtD, returns settled at -1.6% and +7.1%, respectively. Activity levels were mixed, as trading volumes increased by 97.8% Week on Week, W/W while value traded declined by 6.5% W/W. Also, sector performances were mixed, as the Consumer Goods Index dropped by 0.7%, Industrial Goods Index 0.5% and Insurance Index 0.5% while the Banking Index gained 0.9%.The Oil and Gas Index closed flat.
Reacting on market outlook, analysts at Cordros Research stated: “We expect the cautious trading that played out this week to persist in the week ahead, as investors continue will likely be swayed by corporate actions as more companies release results. Nonetheless, we advise investors to seek trading opportunities in only fundamentally justified stocks as the weak macro story remains a significant headwind that could result in persistently weak sentiments.”
Also, analysts at InvestData Consulting Limited, stated: ” We expect growth and yields to drive market players sentiments ahead of more earnings reports in the midst of expected quarter end window dressing and price adjustment for dividend. Income investors continue to target dividend paying and defensive stocks to protect their portfolios post-dividend adjustment. Any pullback at this point may add more strength to upside potentials. As such, investors should take advantage of price correction.”
Portfolio rebalancing on the Nigerian Exchange Limited, NGX, continued on the back of expected corporate earnings inflows and dividend announcement.
This is ahead of the 2023 first quarter, Q1’23, earnings reports and price adjustments of many companies for dividend in view of their payment dates.
Meanwhile, investors’ eyes are still on companies that are yet to release their 2022 audited financial results ahead of the March 31, 2023 official deadline, especially the banks.
Analysts stated that the increasing dividend yields and low market price to earnings ratio provides better opportunities for discerning investors to hedge against inflation even when fixed income market yields look mixed.
But analysis of market transactions last week showed that negative sentiments persisted on the domestic bourse for the second consecutive week as the NGX All-Share Index, ASI dipped by 0.1% to close at 54,892.53 points. Pertinently, losses on BUA Cement by 1.6%and Stanbic IBTC 5.8% undermined the market’s performance.
Thus, the Month-to-Date, MtD, and Year-to-Date, YtD, returns settled at -1.6% and +7.1%, respectively. Activity levels were mixed, as trading volumes increased by 97.8% Week on Week, W/W while value traded declined by 6.5% W/W. Also, sector performances were mixed, as the Consumer Goods Index dropped by 0.7%, Industrial Goods Index 0.5% and Insurance Index 0.5% while the Banking Index gained 0.9%.The Oil and Gas Index closed flat.
Reacting on market outlook, analysts at Cordros Research stated: “We expect the cautious trading that played out this week to persist in the week ahead, as investors continue will likely be swayed by corporate actions as more companies release results. Nonetheless, we advise investors to seek trading opportunities in only fundamentally justified stocks as the weak macro story remains a significant headwind that could result in persistently weak sentiments.”
Also, analysts at InvestData Consulting Limited, stated: ” We expect growth and yields to drive market players sentiments ahead of more earnings reports in the midst of expected quarter end window dressing and price adjustment for dividend. Income investors continue to target dividend paying and defensive stocks to protect their portfolios post-dividend adjustment. Any pullback at this point may add more strength to upside potentials. As such, investors should take advantage of price correction.”
