*Investors advised to focus on fundamentally sound stocks with strong earnings potential
By Bamidele Famoofo
Review
The local bourse closed the week on a mildly negative note, as cautious sentiment shaped trading activities amid profit-taking and portfolio rebalancing ahead of the earnings season and a new quarter. Simply put, many investors chose to secure earlier gains rather than take fresh positions.
Consequently, the benchmark index declined marginally by 0.12% week-on-week to settle at 200,913.06 points, with noticeable weakness in banking and consumer goods stocks. In the same vein, market capitalisation dipped by 12 basis points to ₦128.97 trillion, translating to a loss of ₦156.52 billion for investors.
Despite this slight pullback, the broader market trend remains strong. The year-to-date return is still elevated at 29.11%, reinforcing that the current decline is more of a pause than a reversal. Market breadth also remained relatively balanced at 1.02x, with 46 gainers edging past 45 losers, showing that opportunities still exist beneath the surface.
However, trading activity weakened significantly, as total traded volume plunged by 56.4% week-on-week to 3.95 billion units, while total traded value fell by 24.6% to ₦201.67 billion across 360,710 deals. This sharp drop suggests that many investors are holding back, waiting for clearer market direction.
Sectoral Performance
Sectoral performance was mixed, largely influenced by ongoing rebalancing. The commodities index led the gainers, advancing by 2.77% week-on-week, driven by strong price appreciation in PRESCO and ARADEL. Insurance and oil & gas indices followed with gains of 2.22% and 1.93% respectively, supported by buying interest in FTGINSURE, SUNU ASSURANCE, OANDO, and CORNERSTONE.
On the downside, the banking index led the decliners due to price drops in ZENITHBANK, FCMB, JAIZBANK, and FIRSTHOLDCO. Consumer goods and industrial indices also recorded losses of 0.91% and 0.15% respectively, pressured by declines in CADBURY, NIGERIAN BREWERIES, CILEASING, RTBRISCOE, and LAFARGE AFRICA.
Losers & Gainers
At the stock level, performance was a mix of sharp gains and notable declines. PREMIER PAINTS (+60.3%) and JOHNHOLT (+59.9%) topped the gainers’ chart, followed by LEGEND INTERNET (+25.0%), MCNICHOLS (+20.7%), and PRESCO (+16.4%). On the flip side, LIVESTOCK FEEDS (-11.7%), FIDSON (-10.0%), CADBURY (-9.9%), AUSTINLAZ (-9.9%), and LEARN AFRICA (-9.1%) recorded the steepest losses.
Outlook
Looking ahead, the market appears to be in a short-term correction phase as a natural cooling-off period after a strong rally. With some stocks already trading at 52-week and all-time highs, and a relatively low Money Flow Index (MFI) indicating weak inflows, investors are clearly waiting for fresh catalysts, particularly corporate earnings, to drive the next move.
In the meantime, this phase presents selective entry opportunities, and we continue to advise investors to focus on fundamentally sound stocks with strong earnings potential.
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