The current prices of equities will likely be the driver of increased activities in the equities segment of the Nigerian Stock Exchange this week, analysts have said.

The analysts based their prediction on the fact that within the last few weeks, major equities had been recording marginal price depreciation due to profit taking activities of investors.

They, however, noted that with most of the share prices selling far below their intrinsic value, there would likely be more demand for shares by investors in the next few weeks, thus boosting prices.

According to the analysts, some stocks are still selling at ridiculously low prices, leaving the opportunity for wise investors to cash in and make high returns.

At the close of activities last week, equity trading on the NSE had closed on a bearish note, as major market indicators lost significantly.

Specifically, the market capitalisation of the listed equities fell by N27bn or 0.41 per cent to close on Friday, at N6.615tn, down from N6.641tn recorded at the beginning of the week.

Similarly, the NSE’s All-Share Index dropped by 191.31 basis points or 0.9 per cent from 20,941.93 points recorded at the beginning of the week, to 20,743.16 points.

The NSE-30 Index was also down by 0.9 per cent or8.40 basis points from 956.19 points to 947.79 points while the NSE Banking Index was the hardest hit as it fell by 2.4 per cent or 6.97 basis points from 292.97points down to 286.00 points.

In their weekly market report released last Friday, analysts from Vetiva Capital Management Limited said that despite the losses recorded during the week, market activities would be boosted by the low and attractive share prices, especially from stocks in the financial sector.

They said, “Negative market sentiment nearly wiped out all of the gains made in the previous week as Year to Date returns barely managed to stay above the flat line. The NSE All-Share Index ran a series of red closes, as bears saturated the market; the value of transactions was two per cent weaker from what was obtained in the previous week.

“However, we are positive of how domestic equities will fare in the week ahead, as the attractive prices on most counters, especially in the financial sector, should revive soft entry.”

On their own part, analysts from Meristem Nigeria Limited expressed optimism on positive activities in the market this week.

“This week, we expect the market to still stay within the 20,400 and 21,100 bandwidth. We stay bullish on our expectation as we see the benchmark index returning positive by the end of this quarter,” they stated.

Source: Punch/Udeme Ekwere