NGX Rebounds with N295 Billion Gain on Bargain Hunting

As anticipated by market operators, the Nigerian Exchange Limited (NGX) experienced mixed trading activity for most of the trading days last week.

However, strong bargain-hunting on the final trading day pushed the market into positive territory, with the All-Share Index rising by 0.5%   Week-on-Week, WoW to close at 97,722.28 points from 97,236.19 points.

Also another stock market major gauge, market capitalization, surged over by N295 billion to close on Friday at N59.225 trillion from N58.930 trillion the previous week.

Analysts attributed the surge in market indicators to better than expected third quarter results of some companies across the sub sectors.

Notably, buying interest in UBA led to the increase in its price by 7.9%   followed by   GTCO 4.5%, Flour Mills 22.9%, and WAPCO 9.4%, which underpinned the market’s performance. Consequently, the Month-to-Date and Year-to-Date returns settled higher at 0.1% and 30.7%, respectively.

However, the trading activity was weak, with total volume and value declining by 77.1% and 48.4% WoW, respectively.

The sectoral performance showed that the Banking Index gained 2.8%, Insurance Index 2.8%, and Consumer Goods Index 0.6%, while the Oil & Gas Index declined by 0.3% and Industrial Goods Index 0.2%.

Reacting to the market outlook, analysts at Cordros Research stated: “We anticipate cautious trading in the local stock market in the coming week due to the absence of significant positive catalysts to boost sentiments. In the medium term, we expect investors’ sentiments to be shaped by developments in the macroeconomic landscape and the movement of yields in the fixed-income market.”

Also commenting on market outlook,   analyst at InvestData Consulting Limited said: “We expect mixed sentiments to continue on bargain hunting, profit taking and low valuation ahead of Consumer Price Index, CPI, data and position taking by smart money for year-end.

“Also, sector rotation and portfolio rebalancing continued in the market with investors taking advantage of pullbacks and correction to buy into value.

“This is amid the volatility and pullbacks that add more strength to upside potential.

“Consequently, investors should take advantage of price correction and also looking at the trends and events across the globe and domestically”.