Tracking Nigerian earnings & equities performance

The Nigerian equities market has been a focal point for investors this week, with fluctuating performances and mixed earnings results driving market sentiment. Gbolahan Ologunro, a Research Analyst at Cordros Securities, joined CNBC Africa to provide insight into the market dynamics. Ologunro highlighted two key factors influencing market performance - dividend declarations by corporates and the uptick in the yield environment. These opposing factors have led to a cautious approach by investors, resulting in a mix of positive and bearish sentiments in the market. In the consumer goods sector, impressive earnings were reported by companies such as Dangote Sugar and Nestle. Dangote Sugar saw a 33% growth in revenue, primarily driven by price increments, indicating the company's pricing power in the market. The restriction on the influx of imported products due to border closures also played a role in boosting Dangote Sugar's volumes. Additionally, the telco sector, particularly MTN, recorded a 15% increase in service revenue driven by a surge in data consumption during the pandemic. Despite revenue growth, MTN faced cost pressures due to currency devaluation and inflationary impacts, resulting in a modest 2% growth in profit before tax. The oil and gas space faced challenges, with CEPLAT reporting a full-year loss of $85 million, attributed to the collapse of oil prices in 2020. The company also recorded impairment charges on its assets due to the downturn in the oil market. Looking ahead, market outlook remains cautious with investors weighing the impact of the yield environment on equities. Despite positive earnings declarations by companies like Zenith Bank and Dangote Sugar, market reaction has been muted as investors prioritize risk management in the current climate. Expectations indicate a continued mix of market performance leaning towards a bearish sentiment as investors navigate the evolving economic landscape. In conclusion, the Nigerian equities market continues to face challenges influenced by external factors such as global oil prices, currency devaluation, and the yield environment. As investors tread cautiously, navigating through the market requires a strategic approach and a keen understanding of the dynamics at play. While earnings reports provide insights into the performance of individual companies, overall market sentiment remains cautious, reflecting the broader economic uncertainties impacting the Nigerian equities market.