The Nigerian stock market returned to profitability last week with investors raking in N481 billion net profit in five days as the bears were forced to take the back seat.
The market saw a rebound primarily driven by investors’ interest in the shares of MTN Nigeria, Oando Plc, United Bank for Africa (UBA) and Zenith Bank, which drove the All-Share Index higher by 0.87% to 98,605.79 basis points.
Similarly, the aggregate value of equity investments at the local bourse appreciated by the same percentage points equivalent to N481 billion to close higher at N55.978 trillion from N55.497 trillion it opened the week.
Thus, the Month-to-Date and Year-to-Date returns increased to 0.9% and 31.9%, respectively.
Sectoral performance was largely positive, with 5.1% gain recorded in the banking index, 2.3% uptick in consumer goods index, 1.8% in insurance index and 1% gain in oil and gas index.
Conversely, the industrial goods sector emerged the sole loser after a 3.7% decline at the close of the trading week.
Activity Data
Trading data obtained from the Nigerian Exchange Limited (NGX) showed that the market recorded positive performance amidst deflated activity levels as the total trading volume and value declined by 21.0% and 6.3% week-on-week, respectively.
Specifically, investors traded a total turnover of 2.679 billion shares worth N49.017 billion in 47,451 deals on the floor of the bourse, in contrast to a total of 3.393 billion shares valued at N52.304 billion that exchanged hands the previous week in 44,814 deals.
Meanwhile, the financial services industry led the volume chart with 1.982 billion shares valued at N31.985 billion traded in 23,467 deals; thus contributing 74% and 65.25% to the total equity turnover volume and value respectively.
The oil and gas industry followed with 229.680 million shares worth N7.441 billion in 4,021 deals, while the third place was the ICT Industry, with a turnover of 113.887 million shares worth N3.059 billion in 4,260 deals.
Measured by volume, trading in the top three equities namely Access Holdings Plc, Veritas Kapital Assurance Plc and United Bank for Africa Plc accounted for 756.035 million shares worth N10.726 billion in 6,985 deals, contributing 28.22% and 21.88% to the total equity turnover volume and value respectively.
In the ETP market, a total of 20,375 units valued at N5.912 million were traded during the week in 148 deals compared with a total of 21,051 units valued at N2.202 million transacted in the preceding week in 97 deals.
Trading data further showed that 46 equities appreciated in price during the week higher than 40 equities in the previous week.
On the flip side, 38 equities depreciated in price lower than 40 in the previous week, while 67 equities remained unchanged, lower than 71 recorded in the previous week.
Remarks
Based on the market events in the week, investment experts at Cordros Capital posited that earnings from the Tier-1 banks in the coming weeks will support positive sentiments in the near term, especially given the anticipation of interim dividends.
“In the medium term, we expect investors’ sentiments to be influenced by developments in the macroeconomic landscape and the movement of yields in the fixed-income market,” they advised.
Market observers at Cowry Assets Limited also shared this sentiment, reaffirming the expectation of sustained bullish sentiments in the coming week, buoyed by improving market fundamentals and continued buying sentiment.
According to them, the ongoing dividend earning season is likely to sustain positive sentiment among market players.
“As we await the half-year earnings reports from major banks in the coming weeks, investors are expected to continue repositioning for value, taking advantage of any market pullbacks. Nevertheless, we continue to advise investors to focus on fundamentally sound stocks,” the said in a commentary.
