Stock Index Rebounds by 3.79% as Investors Gain N2.1 Trillion

The benchmark index of Nigerian Exchange Limited (NGX) reversed it loss from last week as it rebounded by a substantial 3.79% week-on-week to another new historic high of 105,722.78 index points.

At the close of trading activities last week, fortune of investors who participated in the market expanded by N2.1 trillion on mixed sentiment and low trade volumes, despite positioning in the bellwether stocks which drove activity.

Consequently, the year-to-date (YTD) return of the index settled at 41.39%, and further contributing to a 3.79% weekly rise in the market capitalization of listed equities to N57.85 trillion.

In the just concluded week, the level of investor sentiment was shaky as market players digested the latest inflation figures which came at 29.90% in January coupled with the expectation for a continued increase in money market rates at the primary auctions which will render the equity markets as an unattractive investment option for investors.

Consequently, the level of trading activity during the week was in a lacluster as investors’ sentiment levels reflected negative market breadth.

As a result, the weekly total traded volume decreased by 37.06% week on week to 1.56 billion units, with the number of trades nosediving by 22.62% to 42,546 deals. In the same vein, the weekly traded value plunged by 23.74% to N36.50 billion.

Meanwhile, sectoral performance for the week exhibited a mixed trend, with two out of five sectors experiencing sharp downturns. The Banking and Industrial indexes bled with losses, declining by 1.34% and 1.83%, respectively.

This was primarily driven by price drops in key stocks such as ACCESSCORP, GTCO, WAPCO, and RTBRISCOE.

On the contrary, the Insurance, Oil & Gas, and Consumer Goods indexes, recorded gains of 2.66%, 10.96%, and 5.25% week-on-week, driven by strong demand and positive price movements in GEREGU, AIRTELAFRI and SEPLAT.

Top-performing stocks at the close of the week included JULI (+46%), GEREGU (+33%), BUAFOODS (+21%), AIRTEL (+10%) and FBNH (+9.8%).

On the flip side, stocks like MEYER (-19%), MORISON (-18%), DEAPCAP (-14%), FLOURMILL (-12%), and ACCESSCORP (-9%) experienced declines in their share prices, respectively.

In the upcoming week, analysts at Cowry Research anticipates a mixed trend of market activities as the recently published inflation data permeates the market with portfolio rebalancing by investors and fund managers seeking alpha in the market as well as the expectations from the fixed income market.

They noted, however, that a pullback at this juncture is expected to strengthen upside potential.

“Amidst all these, we continue to advise investors to take position in stocks with consistent track records of dividend payments and strong fundamentals and growth prospect to support earnings growth,” they said.