The bullish impetus in the Nigerian stock market switched into a higher gear, as investors cherry-picked stocks following decent 2022 Full Year corporate earnings releases.
The market last week drove home N316 billion profit for investors as, a development some market observers claimed, was partially connected to optimism around the emergence of winner in the just conducted presidential election in the country.
As equities yielded profit last week, the All-Share Index (ASI) which tracks share price movements at the Nigerian Exchange Limited (NGX) advanced by 1.06% week-on-week to close at +8.6% Year-to-date (YTD),
Specifically, the ASI added 580 points to close at 55,529.21 basis points while aggregate valuation of equity investments in the market closed crossed N30 trillion market to end the week at N30.250 trillion.
While 53 equities appreciated in price during the week, the profit was most driven by buying interests in the shares of GEREGU (+31.4%), BUAFOODS (+10.5%), DANGCEM (+2.2%) and STANBIC (+18.8%).
Sectoral performance was broadly positive as the Consumer Goods index saw a double-digit leap of +12.3% to post the most significant gain, followed by the Banking (+3.4%), Industrial Goods (+1.8%), Insurance (+0.9%), and Oil and Gas (+0.3%) indices.
Business Metrics understands that equity trading on the NGX resumed March with bullish momentum after the upbeat buying interests and churn out of full-year scorecards by corporates in February that saw the market gain by 4.82% to give investors N1.4 trillion in profit.
The market sustained its positive momentum and recovery ahead of more dividend declarations, or announcements by listed companies coinciding with the outcome of the nation’s presidential elections.
From this point, market observers expect investors to continue to rotate their portfolios toward stocks of companies that delivered decent earnings this week.
“Thus, we see scope for the bulls to maintain dominance, though the magnitude of the gains will be lower, as profit takers are likely to book profits across bellwether stocks,” say analysts at Cordros Capital Limited.
“Notwithstanding, we opine that investors should seek trading opportunities in fundamentally sound stocks as the weak macroeconomic environment remains a significant headwind to corporate earnings,” they added in a note seen by Business Metrics.
Mixed Activity Levels
However, the pockets of gains recorded last week did not make up for seemingly mixed activity level on the course as the weekly trade volume surged by 138.5% while trading value dipped by 43.5%.
A total turnover of 1.910 billion shares worth N18.436 billion in 20,311 deals was traded by investors on the floor of the Exchange, in contrast to a total of 799.848 million shares valued at N29.354 billion that exchanged hands the previous week in 14,194 deals.
Measured by volume, the ICT Industry led the activity chart with 601.396 million shares valued at N2.676 billion traded in 1,607 deals; thus contributing 31.49% and 14.52% to the total equity turnover volume and value respectively.
The Financial Services Industry followed with 585.510 million shares worth N6.949 billion in 8,584 deals, while the third place was the Services Industry, with a turnover of 349.215 million shares worth N2.402 billion in 512 deals.
Meanwhile, Chams Holding Company Plc, Capital Hotels Plc and Transnational Corporation Plc were the most traded equities, measured by volume, as they accounted for 1.038 billion shares worth N2.621 billion in 769 deals, thus contributing 54.33% and 14.22% to the total equity turnover volume and value respectively.
