Index rises by 0.72% as analysts task govt on liquidity

[FILES] Nigerian Stock Exchange (NSE). PHOTO: BLOOMBERG

 By Helen Oji

The equity market squeezed out a marginal gain last week amidst two consecutive sessions of profit-taking pressure, as the NSE All-Share Index appreciated by 0.72 per cent to close the week at 35,137.99 and N18.365 trillion.

However, all other indices finished lower except NSE Main Board, NSE Insurance, NSE ASeM and NSE Oil/Gas, which appreciated by 2.61 per cent, 1.56 per cent.

Analysts argued that prevailing negative sentiment on NSE for two days is an indication that funds left the market due to continued profit-taking.

They urged the government to initiate policies capable of providing more liquidity and a stable exchange rate to stimulate the market positively.

InvestData Consulting Limited said: “The prevailing negative sentiment on the Nigerian Stock Exchange (NSE) for two days, so far, is to be expected, even as market fundamentals remain strong.

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“There is a sign that the market is waiting for another trigger in the form of information or statements such as a policy adjustment by the Central Bank of Nigeria (CBN) capable of providing more liquidity and stable exchange rate to further impact the market positively.

“We expect a mixed trend to continue amid slight improvement in Treasury bills rates, profit-taking, portfolio rebalancing and repositioning in the new month, just as the market awaits inflow of funds from alternative investment and adjustment in CBN policies.”

Analysts at Codros capital said: “In the coming week, we expect the minimal activity in the T-bills secondary market to persist as participants await the issuance of the CBN’s special bills.”

Last week, profit-taking by investors halted six days of a bullish run to commence a downturn on Monday, causing market capitalisation to depreciate by N27 billion.

The All-Share Index (ASI) fell by 51.30 absolute points or 0.17 per cent to close at 30,479.39 points. Similarly, the overall market capitalisation lost N27 billion to close at N15.931 trillion.

The downtrend was impacted by losses recorded in large and medium value stocks, including Mobil Nigeria, Ecobank Transnational Incorporated (ETI), Julius Berger, C&I Leasing, and International Breweries.

Transactions at the NSE, reversed Monday’s negative sentiment to close in an upbeat on Tuesday, causing the All Share Index (ASI) to appreciate by 0.83 per cent.