Bargain hunting activity to continue this week

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Bargain hunting activity to continue this week

By Nkiruka Nnorom

CAPITAL market operators have said that low prices of value stocks will increase the likelihood of bargain hunting in the stock market this week.

This is even as investors recorded N31billion gains following a week of mixed trading.

The market had extended its bearish trend at the beginning of the week with the All Share Index, ASI, falling by one percent on Monday. However, on Tuesday and Wednesday, the ASI appreciated considerably due to bargain hunting in Dangote Cement Plc, International Breweries Plc and FBN Holdings Plc.

The floor of Stock exchange

Nonetheless, profit taking activities resumed on Thursday with the ASI sliding but the week was rounded off on a positive note with the benchmark index recording another gain, resulting in 0.21 percent increase for the week.

Making projections for the week, analysts at Cordros Capital said: “Still-strengthening macroeconomic fundamentals and declining fixed income yields continue to strengthen our medium-to-long term outlook for Nigerian risky assets, while relatively lower prices of value stocks buoy likelihood of bargain-hunting in the short term.”

Also Afrinvest Securities Limited, said: “Despite subsisting weak sentiment, we maintain our near term positive outlook on the market. Hence, in the coming week, we expect market performance to be driven by increased bargain hunting as already witnessed this week.

According to analysts at Meristem Securities, investors are expected to take position on some counters that shed significantly last week.

Meanwhile, investors gained N31 billion last week after the market capitalisation of listed equities rose to N14.784 trillion from N14.753 trillion the previous week, representing 0.21 percent increase. Similarly, the ASI advanced by 0.21 percent to close at 40,928.70 points from 40,841.14 points. Sector performance was largely bearish as only two of the five sectors closed in the green. The oil and gas sector led the gainers chart, rising by 3.8 percent buoyed by buy interest in Seplat Petroleum Development Company Plc, which rose by five percent during the week

The industrial goods sector, followed, appreciating by 1.3 percent on the back of two percent and 0.7 percent increase in Dangote Cement Plc and Lafarge Africa respectively. On the flipside, the banking and insurance sectors were pulled down 2.2 percent and 0.8 percent respectively as a result of losses in United Bank of Africa, UBA’s shares, which fell by 10.5 percent and Zenith Bank Plc, which also nose-dived by 4.4 percent, while Aiico Insurance also fell by 4.4 percent.

Similarly, the consumer goods sector plunged by 0.7 percent following sell offs in Unilever Nigeria Plc, which depreciated by 13 per cent.

The post Bargain hunting activity to continue this week appeared first on Vanguard News.


Source: http://www.vanguardngr.com/

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