Cautious sentiments trail stocks as focus shifts to Q3 earnings

Despite that most stocks at the Nigerian bourse are still attractive to value hunters; they feel better with re-entry guidance from third-quarter (Q3) results.

Recall that stock investors waved-off MPC outcome last week and remained on the side line, which led to record 0.14percent week-on-week (wow) decline in the benchmark Index.

On the heels of this performance, analysts believe any positive close in the near-term will be driven by investors’ willingness to take position ahead of Q3 2017 earnings releases.

“Despite the positive  market  momentum  towards  week  close,  we  note investor  cherry-picking  across  the  market  amidst  an  overall  cautious sentiment. We expect this to filter into this week and anticipate sideways trading at week open”, said Vetiva research analysts in their recent Breakfast Report.

Zenith Bank Plc, FBN Holdings Plc, Diamond Bank Plc, FCMB Group Plc, UACN Plc, Flour Mills Plc, Lafarge Africa Plc, and Seplat are stocks Vetiva analysts recommend investors to buy. 

Last week, thirty-two (32) equities appreciated in price, higher than twenty-five (25) in the preceding week. Thirty-two (32) equities depreciated in price, lower than thirty-five (35) equities of the preceding week, while 107 equities remained unchanged lower than 111 equities recorded in the preceding week.

As the market steps into the last quarter of the year, United Capital research analysts are of the view that performance in the stock market may stay soft in the absence of critical factors to drive demand.

The third-quarter earnings season fast approaches evidenced in companies increasingly issuing notices of closed period in line with the post listing rules of the Nigerian Stock Exchange for quoted companies.

As at time of filing this report, Transcorp Hotels Plc, Transnational Corporation of Nigeria Plc, Wapic Insurance Plc, Access Bank Plc, Guaranty Trust Bank Plc, Royal Exchange Plc, and Lafarge Africa Plc have their various close period notices already at the NSE.

Iheanyi Nwachukwu