The Nigerian equities market began the month of July on a slightly negative note with the All Share Index (ASI) dipping by 0.04% at the close of trading on Monday, July 1.
This decrease translated to a loss of approximately N21 billion for investors, a cautious start to the second half of the year.
The Nigerian Exchange Limited (NGX) reported that the ASI and Market Capitalisation fell from the previous trading day’s highs of 100,057.49 points and N56.601 trillion, respectively, to 100,020.83 points and N56.580 trillion.
Meristem research analysts, in their July 1 note to investors, highlighted the possibility of “cautious optimism” in the equities market, driven by renewed investor confidence.
“We anticipate heightened market activity this week as investors and portfolio managers reassess their positions for the second half of the year,” the note read.
The analysts foresee profit-taking on stocks with significant gains, while others might seek to average down their losses by buying underperforming stocks.
In 10,112 deals, investors exchanged 274,682,596 shares worth N3.712 billion. The year-to-date (YtD) return stood lower at 33.76%.
Meristem analysts also noted that corporate actions in the banking sector could spur buying interest throughout the week, potentially driving market activity.
United Capital research analysts echoed a similar sentiment, suggesting a mixed outlook for the equities market.
“Looking ahead, the equities market would be mixed as investors explore opportunistic investment strategies,” they stated.
They anticipate a focus on fundamentally sound stocks and increased market activities due to ongoing bank recapitalizations, second-quarter filings, and expected corporate actions in the coming weeks.
However, they cautioned that elevated interest rates in the fixed income market could negatively impact the equities market.
“Investors may continue to take advantage of high interest rates in the fixed income space,” they noted.
Despite the challenges, analysts from both firms advised fund managers and investors to adopt an opportunistic investment strategy, leveraging market opportunities as they arise.
As the market navigates the complexities of the second half of the year, a strategic and cautious approach will be essential for mitigating risks and maximizing returns.
