Amidst prevalent economic headwinds in the country, the Nigeria equities market has rebounded to brake free of the shackles of profit-taking as the bulls successfully staged a comeback this week.
Although the local bourse kicked off the week sluggishly, positive sentiments resurfaced later in the week, following renewed interest in banking stocks and rallies in the shares of MTN Nigeria, among others.
Notably, the Nigerian Exchange Limited All-Share Index (NGX ASI) appreciated by 1.46%, adding 1,434.43 points to close the week higher at 99,587.25 basis points.
Similarly, the aggregate value of listed equities at the market soared by N811 billion to close at N56.323 trillion from its opening value of N55.512 trillion.
The positive performance was buoyed primarily by investors’ interest in the shares of First Bank of Nigeria Holdings which grew by 32.7% and GTCO with 16.1% increase in share price.
The share price of United Bank for Africa (UBA) upped by 12.1% while MTN Nigeria followed suit with 6.4% upswing to lift the profit seen by investors in the market at the end of the week.
Despite the positive close, performance was mixed on the sectoral front with only banking and insurance indices closing positive at 9.4% and 1% while Oil and Gas, industrial goods and consumer goods indices moved southward by -0.7%, -0.4% and -0.3% respectively.
According to investment consulting firm, Investdata Consulting Limited, the mixed outlook for May arising from the popular saying among traders that “sell in May and come back in October,” may not be applicable under the current market dynamics just like it has happened over the last five years.
This is as historical data showed that the month of May has closed positively 17 times over the past 26 years, supporting a positive outlook for the rest of the month, having commenced on a positive note already.
Outlook
Market experts unanimously expect the Nigerian equities space to remain regain at the moment as listed companies continue to released better-than-expected full-year report for 2023 and financial statements for first quarter of 2024.
According to Investdata analysts, “We expect the renewed buying interests and positive sentiment in the equity space to continue next week on the back of reactions to Q1 earnings reports and portfolio rebalancing.
“Market players are digesting these earnings and positioning in fundamentally sound stocks at these current low prices and inflow of funds from dividend income as payment and AGM meeting dates announced by various companies are in this month of May.
“Already, the pending 2023 audited accounts from banks are being made available to the market, alongside first quarter corporate earnings majority of which are impressive and beat expectations. For instance, the full-year result that emanated from FCMB was remarkable and outstanding, with robust top and bottom-line growth that supported the proposed dividend of 50 kobo.
“Also, there were remarkable Q1 numbers from Nahco, Julius Berger, CAP, Presco, Wema Bank and Accesscorp, among other, irrespective of the nation’s economic headwinds that resulting from the ongoing reforms and policy implementations of economic managers.”
Investment analysts at Cordros Capital noted that looking ahead, equities investors are expected to adjust their portfolios based on assessment of Q1-24 corporate earnings reports.
They however cautioned that the prospect of higher fixed income yields could dampen buying interests, especially in the absence of any significant positive catalysts.
How investors traded this week
In the just concluded week, the market opened for four trading days as the Federal Government of Nigeria declared Wednesday May 1, 2024 as Public Holiday to commemorate Workers’ Day celebration.
Meanwhile, investors traded a total turnover of 1.941 billion shares worth N32.644 billion in 35,807 deals, in contrast to a total of 1.839 billion shares valued at N34.258 billion that exchanged hands last week in 37,528 deals.
Measured by volume trade, the Financial Services Industry led the activity chart with 1.496 billion shares valued at N22.453 billion traded in 19,225 deals; thus contributing 77.08% and 68.78% to the total equity turnover volume and value respectively.
The Consumer Goods Industry followed with 144.722 million shares worth N5.063 billion in 4,966 deals while the third place was the conglomerates Industry, with a turnover of 109.978 million shares worth N1.539 billion in 2,064 deals.
Meanwhile, the top three equities that received highest trade volume are Abbey Mortgage Bank Plc, Guaranty Trust Holdings Company Plc and Access Holdings Plc as the trio accounted for 898.940 million shares worth N14.314 billion in 5,518 deals, contributing 46.31% and 43.85% to the total equity turnover volume and value respectively.
