By Gbenga Agbana

Wednesday, 17 Nov 2010

The stock market is set to experience liquidity in the next few weeks with the expected release of the N403bn statutory allocation for the month of November, according to market operators.

Also, the purchase of the toxic assets of banks by the Asset Management Corporation of Nigeria will also continue to impact the market positively, but the stock market may not experience growth this week due to profit-taking and investors‘ preference for cash for the Eid-el-Kabir celebrations.

For instance, researchers at Sterling Capital Markets Limited said, ”We expect the release of N403bn statutory allocation for the month of November to create liquidity. The purchase of toxic assets by AMCON will also continue to impact the market positively.

“However, the market may close flat during the week due to profit-taking and preference for cash for the Sallah calebrations. Buy opportunities continue to exist for stocks with good fundamentals for long-term investors. ”

The stock market closed on a bullish note last week, despite profit-taking activities by some investors.

The market had reacted positively to the announcement by AMCON to begin the purchase of toxic assets valued at N2.2tn.

Consequently, most of the rescued banks recorded price appreciation, causing the NSE‘s All-Share Index to increase by 2.229 per cent, to close at 25,367.83 points, compared to a decrease of 0.79 per cent in the preceding week.

The year-to-date return on the ASI stood at 21.80 per cent at the end of the review period.

In the same vein, market capitalisation recorded an increase of 2.29 per cent, to close at N8.10tn, up from N7.92tn recorded the preceding week.

All the four NSE sectoral indices appreciated last week, as the Food/Beverages Index rose by 0.65 per cent, to close at 803.88 points.

The Insurance Index rose by 0.43 per cent, to close at 165.80 points, while the Banking and the Oil/Gas indexes also rose by 6.19 per cent and 0.12 per cent, to close at 389.94 and 336.90 points in that order.

 

Source: Punch