Mixed Market Sentiments Persist as Investors Rebalance Portfolios Amid Selloffs

The Nigerian stock market experienced mixed sentiments last week, as portfolio reshuffling and selloffs dominated trading activity. For the third consecutive week, major market indicators closed lower, with shares in both mid and highly capitalized companies witnessing declines. Analysts pointed out that companies have started announcing board meetings to approve their audited financial statements for 2024, a development expected to impact the market positively if the results meet expectations.

MTN Nigeria, Oando, and UBA were at the forefront of the selloffs, with their stock prices falling by 4.2%, 7.1%, and 3.6%, respectively. This resulted in a drop in the All-Share Index (ASI) by 0.5% Week on Week (W/W), closing at 105,955.13 basis points. Market capitalisation also decreased by over N366 billion, closing at N66.351 trillion, down from N66.717 trillion the previous week.

Despite the market downturn, trading activity saw a boost, with total volume and value increasing by 81.6% and 34.9% W/W, respectively. Sectoral performance was mixed, as the Oil & Gas, Banking, and Industrial Goods sectors saw declines, while the Insurance Index increased by 0.9%. The Consumer Goods Index remained stable.

Looking ahead, analysts expect market sentiment to be influenced by the upcoming February inflation report and the performance of fixed-income yields. Analysts at Cordros Research anticipate potential bargain hunting in banking stocks, while those at InvestData Consulting predict continued mixed sentiments driven by profit-taking, portfolio reshuffling, and the digestion of corporate earnings reports. Investors are encouraged to look for opportunities in price corrections and value buying amidst market volatility.

SOURCE: VANGUARD