The rally witnessed in the equities market in April was halted in May as rising yields in the fixed income securities market reduced demand by investors.
The 2020 full year and 2021 first quarter corporate earnings had triggered high demand for stocks, leading to a gain in April after a bear run in February and March. Commenting on the market performance, the Chief Research Officer, Investdata Consulting, Mr. Ambrose Omordion, said the weak outcome resulted partly from indecision among the traders despite better-than-expected corporate earnings in the midst of weak economic data and rising insecurity challenges.
“This is a vaccine year with breakthroughs in vaccines that had led to global vaccination, which are supporting economic recovery of different climates and oil prices in the international market. The month negative performance is an opportunity for discerning investors and traders to position and build wealth,” Omordion added.
Okoya stated that as much as the rising yield presents a downside risk to equity offerings and they continue to rebalance clients’ portfolio to reflect their proactive view on the different segments of the market and broader macro outlook, they remained buyers of equities. A financial analyst, Abiola Rasaq, said with rising yield on fixed income market, investors might be reducing exposure to equities, a phenomenon which may reflect the moderating risk appetite of both retail and institutional investors.
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