Analysts Forecast Good Year for Stock Investors in 2017
As the news of improvement in the economy of the country filters the airspace, analysts have reaffirmed their projections that equities investors are in for a good year in 2017.
At Cordros, analysts believe that the Nigerian equities market remained strong with the outlook for the economy and corporate earnings in third-quarter of 2017 and full-year 2017 broadly bullish.
“Particularly, in light of the improving macroeconomic environment buttressed by the recently released 2017 second-quarter GDP figure, wherein the economy exited recession, following uptick in activities in both the oil, crude oil production averaged 1.88mb/d in May, a 4.75 per cent m/m and 11.64 per cent y/y increase from production level in April 2017 and May 2016 respectively, and non-oil sectors.
Looking into the immediate future, Cordros analysts expected continued volatility in the market in the weeks ahead, albeit, with a positive bias.
Also, APT Securites’ research indicated a marginal bargain last week as investors’ sentiments still remained fragile even as the economy steps out of recession.
They, however, expected this week’s trading activities to improve leading to a higher positive stance hoping that big cap stocks that have shed weight so far counter last week negative position.
A summary of trading activities on the Nigerian Stock Exchange (NSE) showed that the market closed higher for the first time in four weeks, following bargain hunting in Consumer Goods stocks.
The market session for the week, which started on Tuesday due to public holiday on Monday, on a negative note, extending the losing trend on the bourse to five consecutive sessions.
Domestic equities rebounded on Wednesday, and added a few basis points on Thursday, cumulating to two per cent. However, the gains were bucked on the last trading day, as investors took profit in the Industrial Goods and Banking stocks, with the former recording the biggest daily loss at 1.18 per cent.
Overall, the All Share Index improved by 1.27 per cent last weet to 35,957.24 points, pushing the MtD and YtD returns higher to 1.27 per cent and 33.80 per cent, respectively.
Worthy of note is the top-ranked gain recorded during the week by Guinness Nigeria Plc by 27.59 per cent, following the release of an impressive full year 2016/17 result, wherein its sales expanded by 23.5 per cent to N125.9 billion while PBT and PAT came in at N2.7 billion and N1.9 billion respectively, from the losses recorded the previous year.
In line with the performance, Guinness proposed dividend was increased by 28 per cent to N0.64, which translates to a dividend yield of 0.66 per cent based on Friday’s closing price.
Performance across sectors was broadly bearish, save for the Consumer Goods index which appreciated 2.01 per cent w/w due to gains recorded in the shares of Guinness, Dangote Sugar, Flour Mills and Champion Breweries.
On the flip side, the Oil & Gas (-3.77% w/w) and Banking (-1.08% w/w) indices recorded the largest losses, as profit taking persists in Seplat, Total, United Bank of Africa Plc and Guaranty Trust Bank respectively..
Likewise, losses recorded in the shares of WAPCO, CCNN, Linkage Assurance and Continental Insurance contracted the Industrial Goods index by 1.01 per cent and the Insurance Index by 0.10 per cent accordingly.
Market breadth however remained repressed, closing negative with 36 losers led by Stelling Bank Plc at -7.55 per cent; and 28 gainers led by Guinness at +27.59 per cent.
In the same vein, total volume traded declined by 11.21 per cent, with Access, Guaranty Trust and Zenith banks accounting for 36.14 per cent of total market volume, while on the other hand, total value of trades advanced by 52.33 per cent, with Nestlé Nigeria, GTB and Zenith Bank accounting for 53.61 per cent of total value.
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