H1 earnings to guide stock market sentiment this week

Stock market investors can turn their attention to earnings season, as more companies release their half yearly results during the week.

analyst optimism

According to Cordros Securities Ltd., in the interim, we believe that the full thrust of the H1-22 earnings season will dictate market sentiments and potentially lead to positive performance as investors remain fundamentally conservative with a consistent history of interim dividend payments. Looking for bargains in strong stocks.
“Despite this, we envisage heavy selling pressure on stocks of companies that underperformed in H1-22. Overall, we reiterate the need to position only fundamentally stronger stocks as the weak macro environment remains a significant headwind to corporate earnings,” it said.
In the new week, analysts at Cowry Assets Management Ltd were expecting the market to trade in mixed sentiment as the unimpressive macro story amid continuing earnings release continues to be a headwind for the market’s performance. At the same time, we continue to advise investors to trade stocks with strong fundamentals and a positive outlook.

On the market outlook, GTI Securities Ltd noted that the equity market closed positive on the last trading day of last week; Despite continuous selling during the week. “This is likely due to positive sentiment driven by the recent release of the companies’ Q2 financial statements. We expect investors to continue to respond as more companies disclose their Q2 performance in the new week,” it reported.

Last week’s trading activities

The local market remained bearish for the second consecutive week as profit-booking activities dominated the performance of the market with losses in the benchmark index in four of the five trading sessions of the previous week.
Notably, the all-share index closed 3.10 per cent lower at 50,370.25 points last week. Similarly, the market capitalization closed down from N868 billion to N27.163 trillion.

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In short, sell-offs in MTN Nigeria Communications (MTNN), Stanbic IBTC Holdings, Nestle Nigeria and Guaranty Trust Holding Company (GTCO) led to weekly losses.
Sector-wise performance was negative. The week-on-week insurance index declined 5.0 per cent. The Consumer Goods Index posted a weekly loss of 4.6 per cent, while the Oil and Gas Index declined 1.0 per cent.
Also, the banking index fell 0.4 per cent, while the industrial goods index fell 0.2 per cent for the week. Market breadth was negative for the week as 11 equities appreciated in price, 53 stocks declined while 92 equities remained unchanged. Nigerian Aviation Handling Company (NAHCO) closed the profit table at N6.00 per share, up 9.09 per cent. Union Bank of Nigeria (UBN) closed 7.84 per cent higher at N5.50, while UPDC Real Estate Investment Trust closed 4.41 per cent higher at N3.55, per share.
On the other hand, PZ Cussons Nigeria edged up 18.27 per cent on the decline table to close at N8.50, per share. Wema Bank closed 17.54 per cent lower at N3.29, while Ikeja Hotel was down 17.09 per cent at 97 kobo, per share.
In all, a total of 1.546 billion shares of N16.289 billion in 23,873 deals were traded on the floor of the exchange by investors last week, as opposed to a total of 917.190 million shares of N14.803 billion that exchanged hands last week. were providing. in 19,513 deals.
The financial services industry (measured by volume) led the activity chart with 1.192 billion shares valued at N5.978 billion traded in 11,996 deals; Contribution of 77.11 per cent and 36.70 per cent respectively to the total equity traded volume and value. The conglomerates industry followed with 102.969 million shares of N236.618 million in 858 deals, while the consumer goods industry traded 102.937 million shares worth N2.616 billion in 3,167 deals.

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Trading in the top three equities, namely International Energy Insurance, Transcorp Hotels and Zenith Bank (measured by volume) contributed 798.900 million shares of N2.602 billion across 3,110 deals, accounting for 51.69 per cent and 15.98 per cent of the total equity turnover volume. given and value respectively.

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