Stock Market Opens First Trading Week Negative on Sharp Profit-taking
The Nigerian stock market opened first trading week in 2021 negative due to sharp profit-taking on highly capitalised stocks.
However, hope is not lost for rebound as yield on fixed income instruments remain under Central Bank of Nigeria, CBN, dovish policy lock.
Analysts exhibit stronger expectation for rebound this week, with projection that NSE Oil and Gas would do well due to recovery in the global oil prices.
The NSE-ASI closed negative in the broadly positive opening week of 2021, slipping -0.4% week on week to 40,120.22 points pts.
Overall value and volumes exchanged declined 42.6% and 17.5%, respectively while market capitalisation settled at N21.0 trillion.
Analysts at United Capital however said the overall performance reflects profit taking on heavyweights such as DANGCEM after the December surge.
In addition, negative performance also mirror value depreciation in MTNN (-2.8%) and OANDO (-4.1%).
The above notwithstanding, performance by sector indicated a rather positive sentiment for stocks as 4 out of 5 sector indicators appreciated week on week.
The Oil & Gas sector was the best performer surging +13.2%, mirroring oil price rally during the week.
Hence, SEPLAT (+23.3%) and ARDOVA (+20.7%) surged week on week. The Insurance sector follows, up 9.5% as NEM appreciated by a staggering 28.5%.
Also, the Banking and Consumer Goods sectors appreciated +3.2% and +2.6%, respectively, on gains in ETI (+10.0%), ACCESS (+7.1%), CHAMPION (+18.6%) and INTBREW (+16.0%).
The Industrial Goods sector dipped -2.3% due to 8.1% depreciation DANGCEM stock.
Finally, market sentiment closed positive as 50 tickers advanced against 21 decliners, bringing market breadth to 2.4x.
This week, analysts are expecting to see a sustained bullish bias in the market, particularly in the Oil sector, as Oil stocks remain considerably undervalued.
“We anticipate some profit-taking on stocks which during the late December rallied considerably”, United Capital analysts stated.
In the same way, analysts at Afrinvest said they are expecting to see bargain hunting this week.
Some stocks in the global stock market however open the week positive on improve oil and hope on coronavirus vaccines.
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Stock Market Opens First Trading Week Negative on Sharp Profit-taking
