Nigeria's stocks extend losses for third week

Nigeria's equity market extended losses for the third consecutive week as the All Share Index declined by 1.3% last week, marking a challenging period for investors. Ayodeji Ebo, the Managing Director of Afrinvest Securities, provided insights into the market performance and shared expectations for the upcoming week. Ebo highlighted that while there were some positive aspects in terms of market breadth and select stock performances, overall market sentiment was impacted by declines in certain sectors. The oil and gas sector emerged as a lone gainer, while the banking index faced significant losses, with key players like Fidelity Bank reporting a decline in dividends and ETC High posting disappointing 2016 results. Investor confidence also took a hit, leading to a week-on-week loss for banking stocks. Looking ahead, Ebo discussed the potential impact of a new circular by the Central Bank of Nigeria (CBN) aimed at addressing foreign exchange challenges and boosting investor confidence. The new window introduced by the CBN is seen as a positive development that may provide relief to foreign investors and help establish a fair value based on market demand and supply. Ebo expressed optimism that the new policy could boost confidence and attract inflows, contributing to market stability. In terms of the market outlook for the week, Ebo mentioned expectations of early positioning following the CBN's intervention and the release of Q1 2017 results by various companies. He emphasized the importance of sector performance in shaping investor decisions and highlighted the banking sector as one to watch due to its dominant role in market activity. Ebo suggested that investors might consider short-term trades in the banking sector ahead of upcoming financial results. Overall, the Nigerian equities market faces challenges amid ongoing losses, but the introduction of new policies and the anticipation of corporate earnings could influence market dynamics in the week ahead.