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Domestic Stock Market Returns to Profitability with N459BN Gain



Nigeria Stock Index Surpasses Historical 68,000 Mark

Activities on the floor of the domestic stock market last week ended in the green territory with N459 billion profit, returning the bourse to profitability after it previously slid into recession the previous week.

The Nigerian Exchange Limited (NGX) posted an impressive 1.29% growth to assume a higher stand in contrast with the mixed sentiments that dominated the global equities market during the week as investors kept gaze on the highly anticipated speech by the US Federal Reserve chief in Jackson Hole for insights into upcoming interest rate trends.

The NGX All-Share Index (ASI) added 837.82 points to close the week at 65,558.91 basis points while market capitalisation added N459 billion to push up valuation of equities investments in the country to N35.881 trillion from N35.422 trillion it commenced the week.

Specifically, the comeback was driven by investors’ interest in the shares of BUAFOODS (+7.9%), DANGSUGAR (+35.7%) and TRANSCORP (+39.4%). As a result, the Month-to-Date and Year-to-Date gains increased to +0.6% and +26.3%, respectively.

From a sectoral standpoint, the Consumer Goods index advanced by +11.6% to lead the charts, followed by the Insurance index (+1.2%). On the flip side, Banking index shed -3.6%, trailed by and Oil and Gas with -2.4% decline. The Industrial Goods index closed flat.

Activity level and distribution

Analysing activity levels, the total trading volume increased by 7.3% week-on-week while the trading value declined by 0.4% week-on-week.

These represent a total turnover of 1.812 billion shares worth N29.299 billion in 31,163 deals traded by investors on the floor of the Exchange, in contrast to a total of 1.689 billion shares valued at N29.407 billion that exchanged hands the previous week in 29,477 deals.

Measured by volume, the Financial Services Industry led the activity chart with 936.685 million shares valued at N10.116 billion traded in 12,886 deals; thus contributing 51.68% and 34.53% to the total equity turnover volume and value respectively.

The Conglomerates Industry followed with 461.589 million shares worth N2.333 billion in 3,451 deals, while the third place was the Consumer Goods Industry, with a turnover of 127.310 million shares worth N5.003 billion in 5,792 deals.

Meanwhile, Transnational Corporation Plc, Fidelity Bank Plc and Access Holdings Plc attracted most investors’ attention in terms of traded volume, as the trio accounted for 693.533 million shares worth N5.030 billion in 5,450 deals, contributing 38.26% and 17.17% to the weekly total equity turnover volume and value respectively.

Investors in the Exchange-traded products (ETP) segment of the local bourse traded a total of 11,914 units valued at N3.980 million week in 72 deals compared with a total of 30,336 units valued at N2.039 million transacted last week in 69 deals.

In the fixed income wing, a total of 103,716 units valued at N107.327 million were traded in 30 deals by investors on the floor of the exchange compared with a total of 292,995 units valued at N294.933 million transacted last week in 48 deals.

Global Market

The global market ended on mixed sentiments as the US equities (DJIA: -1.2%; S&P 500: +0.2%) were mixed as investors digested Nvidia’s better-than-expected earnings report amid fears of more hawkish signals from the Federal Reserve.

On the other hand, European equities (STOXX Europe: +0.7%; FTSE 100: +1.0%) were supported by expectations that subdued economic data would prompt central banks to halt their interest rate hiking cycles.

Elsewhere, in Asian markets (Nikkei 225: +0.6%; SSE: -2.0%) sentiments were shaped by mixed corporate reports and outlook for the Fed interest rate policy.

Lastly, the Emerging (MSCI EM: +1.9%) and Frontier (MSCI FM: +0.1%) market indices posted gains following bullish sentiments in Taiwan (+0.7%) and Vietnam (+0.4%), respectively.

Looking Ahead

Looking ahead, investment experts at Cordros Capital expected investors’ sentiments to be influenced by developments in the macroeconomic landscape and the movement of yields in the fixed-income market.

“Overall, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings,” they said in a note.

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