MPC: financial experts predict mixed performance for stock market

Some financial experts on Monday predicted that the Nigerian Stock Exchange (NSE) would witness mixed performance this week ahead of the Monetary Policy Committee (MPC) meeting and year-end rebalancing.

They told our reporter in Lagos that market volatility would continue as investors expect the outcome of the two-day MPC meeting on Nov. 21 against Moody’s downgrade.

Dr Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University Keffi, said that investors would likely embark on profit taking as they await the outcome of the meeting.

Uwaleke said that the MPC would likely retain the rates, noting that investors would expect the committee to address the recent downgrade by Moody and removal of some stocks from the MSCI index.

He stated that the equities market was hit by the news of the removal of some stocks such as FBN and Forte Oil from the MSCI Index.

Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said that the market volatility would continue as investors react to the third quarter Gross Domestic Product (GDP) data.

Omordion said that the outcome of the MPC meeting, the last for the year would also determine market performance for the week.

He added that investors would be awaiting members’ meditation on reasons for the recent downgrade of the Nigeria Sovereign Wealth Fund and its financial institutions amid positive economic data.

According to him, traders are expected to take advantage of volatility and the emerging numbers for re positioning and re-balancing of their portfolio ahead of year-end festive activities.

“One thing that is clear in the current market situation is that smart investors are accumulating and enhancing their positions in selected stocks,’’ Omordion stated.

He urged investors to allow numbers to guide their decisions, while re-positioning for the rest of the year trading activities, especially now that prices of stocks were looking down following improved economic and market fundamentals.

It was reported that a total turnover of 2.80 billion shares worth N54.78 billion were traded by investors in 17,792 deals last week.

This was against the 1.32 billion shares valued at N13.78 billion exchanged in 19,169 deals in the preceding week.

The Financial Services industry led the week’s activity chart with 2.35 billion shares valued at N8.99 billion traded in 9,364 deals.

The Consumer Goods sector followed with 178.98 million shares worth N16.85 billion in 4,297 deals.

The third place was occupied by Industrial Goods Industry with a turnover of 140.57 million shares worth N27.85 billion transacted in 794 deals.

The NSE All-Share Index dipped 416.70 points or 1.12 per cent to close at 36,703.58 against achieved 37,120.28 in the preceding week.

The market capitalisation which opened at N12.847 trillion shed N73 billion or 0.57 per cent to close at N12.774 trillion.

Leventis led the gainers’ table in percentage terms, gaining 27.27 per cent or 15k to close at 70k per share.

Forte Oil followed with a gain of 10.25 per cent or N4.52 to close at N48.62, while BOC Gases gained 9.88 per cent or 41k to close at N4.56 per share.

On the other hand, Caverton topped the losers’ chart in percentage terms, shedding 21.43 per cent or 36k to close at N1.32 per share.

Linkage Insurance Plc trailed with a loss of 17.65 per cent or 12k to close at 56k, while C &I Leasing were down by 13.77 per cent or 33k to N1.44 per share.