Analysts differ on market direction this week

Analysts differ on market direction this week

Investment analysts have expressed divergent views on the state of the equities market after the volatility recorded last week.

Some believed that the market would follow in the pattern witnessed last week where trading alternated between gains and losses through each trading day, but eventually ended in the red week-on-week.

Others argued that the market would close in the green territory given that all sectoral indices closed positive at the end of trading last week.

The major equities gauge, the All-Share Index, ASI, had closed lower at -0.3 percent to 27,698.69 points following the volatility and flight to safety by investors, despite the freshly constituted economic advisory t by the president

Consequently, investors lost N39 billion as the market capitalization of all listed equities closed at N13.523 trillion from N13.484 trillion.

In their view,  analysts at Cordros Capital said: “Over the coming week, we expect the market to remain pressured given global risk-off sentiments and weak domestic participation. Nonetheless, we note that valuations remain attractive while price deterioration has resulted in expected dividend yields on some stocks rising significantly to levels on par with yields on Treasury Bills.”

They, therefore, advised long term investors to consider appropriately timed investments in the ensuing bearish run. However, analysts at Cowry Asset Management opined that the market would close in the positive territory, saying: “As it appears, investors are beginning to take position in some value and growth stocks given that all the five sectoral indices closed in green territory.”

Author: NZE Ihunanya

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