NGX Climbs as Equities Investors See N398bn Gain
The Nigerian Exchange, NGX climbed as market added about N398 billion to investors’ wealth following increased positioning by value hunters, alpha seekers in the local bourse last week.
A slew of stockbrokers and market analysts are of the view that the local stock exchange exhibited resilience this past week, characterised by a touch of bullish optimism.
Investors continued their portfolio repositioning activities, with sectoral allocations coming into play ahead of the holidays, Cowry Asset Management Limited told clients via email.
The positive market breadth supported a pattern reversal from the recent pullback, bolstered by the market’s low valuation, stockbrokers explained.
Some market analysts said recent past price depreciation had created fresh entry points for bargain hunting on the Nigerian Exchange, noting that this could stay longer due to moderation in rates at the central bank auctions – spot rate cut happened successively at the long end of the curve.
Weighing the market dynamics, investors that were seeking high return with moderate appetite for risk taking boost their shareholdings by parking funds in underpriced stocks.
Data from the Nigerian Exchange showed that the All-Share Index increased by 0.71% week-on-week, closing at 99,925.29 points, reflecting strong investor interest in energy and financial stocks.
The market recorded 51 weekly gainers against 34 weekly decliners, according to Cowry Asset Limited, buoyed by bullish sentiment that firmly established the bulls’ dominance on the benchmark index in three out of the four trading sessions this week.
Consequently, the year-to-date return advanced to 33.64%, closely tracking annual inflation rate of 33.95%. Top performers for the week include CUTIX (+28%), REGALINS (+24%), CHAMS (+23%), TOTAL (+21%), and FTNCOCOA (+20%).
Conversely, negative investor sentiment led to sell-offs in DAARCOMM (-18%), CILEASING (-15%), CUSTODIAN (-11%), ETI (- 11%), and NASCON (-10%), positioning these stocks as the top losers for the week, Cowry Asset said in its market update.
Stockbrokers stated that sectoral performance was particularly strong, with the Oil & Gas and Banking indices leading the gainers with increases of 5.28% and 3.63% respectively.
The stocks contributing to these gains included TOTAL, UNITYBNK, STERLINGNG, FIDELITYBNK, OANDO, and ZENITHBANK.
Following closely were the Insurance, Consumer Goods, and Industrial Goods indices, which rose by 3.42%, 1.05%, and 0.27% respectively, thanks to positive price movements in REGALINS, CUTIX, GUINNESS, PRESCO, NIGERIAN BREWERIES, JULIUS BERGER, and NEM.
The total traded volume surged by 54.63% week-on-week to 2.63 billion units, while the total weekly traded value sharply increased by 43.14% to N43.65 billion. However, the total number of trades for the week declined by 10.74% to 33,709 deals.
Overall, equities market capitalisation of the Nigerian Exchange gained N397.74 billion to N56.53 trillion. “Looking ahead to the next week, a mixed trend is expected, driven by profit-taking activities”, Cowry Asset said.
Stockbrokers, market analysts added that sector rotation and portfolio rebalancing on the exchange are expected to continue in anticipation of the second half of the year’s window dressing activities.
As trading volume patterns continue to fluctuate, suggesting buying interest in some sectors and profit-taking in others amidst a wait-and-see attitude among market players, investors are advised to trade in stocks of companies with sound fundamentals. #NGX Climbs as Equities Investors See N398bn Gain
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