July 22 (Sango-Otta) - With the absence of any positive event capable of lifting investors' sentiment, coupled with the lack of significant positive movement in large cap stocks, the domestic bourse extended last week's bearish performance into Monday's session.
However, with the persistent declines we've seen across board in recent times (especially in the Banking sector), analysts at Vetiva Capital Management Ltd in Victoria Island expect to see positive investors' patronage in the coming sessions, driven by cheap valuations of a number of fundamentally justified stocks.
Stocks to Watch
Pharma giant,
GLAXOSMITH again replicated Friday's bullish performance, gaining another 947bps in today's session to close at N 5.20. With the consistent capital appreciation posted in the last two sessions, its YTD performance moderated to -5.45% from the -13.64% posted on Friday.
On the Offer Cart: The Banking sector again continued with the bearish performance posted last week, closing as the worst performing sector for the day, after declining 45bps. The sector was adversely affected by declines in stocks such as
ETI (-230bps),
ACCESS (-161bps),
FBNH (-100bps) and
ZENITHBANK (-63bps) among others.
In our opinion (easykobo), banking stocks could continue to suffer as the CBN failed to increase the benchmark lending rate which fell below the inflation rate yesterday. This was a key technical point which was breached yesterday and the CBN did not do anything at the MPC. This signals willingness to let the Naira weaken further to foreign investors. We could be in for further banking stocks bashing this week with bargain hunting on going. However there could be gains elsewhere in the pharma sector and agriculture sector which will benefit as a result of higher inflation.
reporting for easykobo.com on Tuesday, July 21 2020 from Lagos, Nigeria
Source - Analysts at Vetiva Capital Management Ltd in Victoria Island. All opinions expressed in above article are those of analysts at VetiVa Capital Management Ltd in Victoria Island except the last paragraph which is opinion of easykobo analyst.