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Financial experts link stock market decline to inflation figure, earnings expectations

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Some financial experts on Monday attributed mixed performance being experienced at the Nigerian Stock Exchange (NSE) to anticipation of June inflation figure and second quarter results.

They told the News Agency of Nigeria (NAN) in separate interviews in Lagos that the market would continue to witness mixed performance till the release of earnings report and June inflation data.

Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said that portfolio investors would continue to embark on sell pressure to reposition ahead of earnings season reporting and inflation figure by the National Bureau of Statistics (NBS).

He said that the market witnessed mixed sentiments last week due to ‘wait and see’ of investors to ascertain the direction of second quarter reports being expected.

 

 

Omordion, however, expressed optimism that the market would be upbeat with positive second earnings and further fall in inflation figure.

He also urged the Federal Government to ensure speedy implementation of the 2017 budget to revitalise the economy.

Dr Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University Keffi, urged government to guard against avoidable delay in the implementation of the 2017 budget, especially the capital expenditure component.

Uwaleke said that the Central Bank of Nigeria (CBN) should begin to consider loosening of the monetary policy to sustain economic recovery and growth.

 

 

He stated that with continuous recovery of the economy and gradual return of confidence on the part of both foreign and local investors, the market fortunes in the second half would likely outperform the first half.

Uwaleke said that stock market performance in the first half of the year was largely influenced by macro economic performance.

He noted that the optimism was hinged on the high likelihood that the economy would be out of recession latest by the third quarter and proved access to foreign exchange.

Uwaleke added that retreated headline inflation, improvements in the ease of doing business and positive half year financial results of listed companies would boost market performance.

 

 

NAN reports that a turnover of 1.06 billion shares worth N12.29 billion were exchanged by investors in 18,847 deals last week by investors.

This was in contrast to 1.17 billion shares valued at N11.46 billion exchanged in 13,763 deals in the preceding week.

The Financial Services Industry led the week’s activity chart with 802.19 million shares worth N7.33 billion traded in 11,334 deals.

The sector contributed 75.62 per cent and 59.63 per cent to the total equity turnover volume and value.

The Conglomerates sector followed with 109.38 million shares valued at N174.60 million achieved in 1,024 deals.

The third place was occupied by Consumer Goods Industry with a turnover of 62.99 million shares worth N2.405 billion exchanged in 3,021deals.

The NSE All-Share Index and market capitalisation depreciated by 1.99 per cent and 2.31per cent to close the week at 32,459.17 and N11.187 trillion.

An analysis of the week’s activity chart indicated that 16 equities appreciated in price during the week, lower than 40 equities in the previous week.

Similarly, 51 equities depreciated in price, higher than 28 equities in the previous week.

Cutix Plc led the gainers’ table in percentage terms, gaining 10.00 per cent or 20k to close at N2.20 per share.

It was trailed by Continental Reinsurance with a gain of 9.24 per cent or 11k to close at N1.30 and Honey Well Flour Mills appreciated by 7.95 per cent or 14k to close at N1.90 per share.

Conversely, May and Baker led the losers’ chart in percentage terms, shedding 25.77 per cent or N1 to close at N2.88 pet share.

Neimeth trailed with a loss of 24.42 per cent or 21k to close at 65k and Conoil was down by 18.51 per cent or N8.25 to close at N36.31 per share. (NAN)

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