As the stock market moves into the second half of 2024, investors are closely watching earnings reports and interim dividends from banks and other companies amidst the ongoing recapitalization efforts across various sectors.
The recent price corrections and profit-taking on the Nigerian Exchange Limited (NGX) are creating buying opportunities for astute investors amid ongoing portfolio rebalancing ahead of the latter half of the year.
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- Foreign investments in manufacturing down 57.4% to N192bn in Q1’24
- Strength of US economy to support global growth of 2.6% this year.
Financial analysts predict that market activities will be dominated by primary market activities, particularly banks and other companies raising funds to bolster their capital bases.
Last week, market activities remained cautious and slow as companies entered their close periods before releasing their H1’24 earnings reports. The NGX All-Share Index (ASI) saw a marginal decline of 4 basis points Week on Week (W/W), closing at 100,022.03 points compared to 100,057.49 points the previous week. Year-to-date (YtD) returns stood at 33.8%, with market capitalization closing at N56.580 trillion, down from N56.691 trillion the previous week. Total traded volume and value decreased by 14.6% W/W and 37.6% W/W, respectively.
Despite these trends, sectoral performance was mostly positive, with gains recorded in Banking (+3.9%), Oil and Gas (+3.0%), Insurance (+2.3%), and Industrial Goods (+0.2%), while the Consumer Goods Index declined by 0.7%.
Analysts at Cordros Research commented on market developments, stating, “As we approach the half-year earnings season, investors will scrutinize corporate performance for signs of improvement following a generally lackluster Q1-24. We anticipate mixed market performance in the coming week, with bargain hunting tempered by occasional profit-taking.”
Offering their outlook, analysts at InvestData Consulting remarked, “We expect mixed sentiments and profit-taking that will present new entry opportunities for discerning investors ahead of the earnings reporting season, which is set to commence soon. Portfolios are being repositioned to capitalize on pullbacks and value opportunities amidst market volatility and global and domestic events.”
In summary, the market landscape reflects cautious optimism with strategic investment decisions influenced by upcoming earnings releases and ongoing sectoral recapitalization efforts.
