Bullish sentiment despite profit-taking help investors gain N337.23bn in one week

The total transactions on the local bourse have hit N2.35trn at the end of May, indicating a 115.40 per cent increase compared to the first five months of 2023.


The benchmark index of the Nigerian Exchange Limited last week sustained its upward momentum, recording a gain of 0.91 percent week -on-week, culminating at an impressive 68,143.34 points.

Market experts have attributed the bullish trend to several key factors, including a favourable market breadth, in the face of profit-taking activities in select blue-chip stocks.

It is also believed that the recent ruling from the presidential election tribunal and the decline in money market rates subsequent to the last treasury bills auction played pivotal roles in propelling the All-Share Index to reach a new all-time high, surpassing the psychologically significant 68,000 points threshold.

Concomitantly, the total market capitalization of listed equities experienced a concurrent uptick of 0.91 percent week-on-week, ascending to a noteworthy N37.30 trillion compared to the previous week’s figure of N36.96 trillion.

This ascent equates to a substantial profit increment of N337.23 billion for discerning investors.

Worthy of mention is the commendable year-to-date return of the All-Share Index (ASI), which has inched further upward to a 32.96 percent.

On sectoral performance, the week unveiled a mixed bag.

The Banking Index emerged as the gainer’ champion with a 5.55 percent, closely followed by the Consumer Goods index, which recorded a gain of 2.94 percent.

Active and robust buying interest in stocks such as PZ, FCMB, CADBURY, and FIDELITYBNK stemmed the gains.

Conversely, the Insurance sector bore the bearish sentiment, registering a decline of 2.94 percent. This descent was primarily attributed to price depreciations in CORNERST and LINKASSURE. Following suit, the Industrials and Oil & Gas sectors also exhibited signs of decline, albeit to a lesser extent, with losses of 0.49 percent and 0.12 percent respectively.

Trading activity throughout the week remained characterized by buoyant sentiments, as evidenced by robust trade volumes and values, despite the market experiencing gains in only 3 out of 5 trading sessions.

The weekly tally of deals exhibited a 5.93 percent week-on-week increase, totaling 43,152 deals.

Moreover, the average traded volume witnessed a modest weekly increase of 2.34 percent, settling at 2.57 billion units.

Notably, the weekly average value displayed a more substantial uptick, with a 34.12 percent increase, reaching a value of N44.01 billion compared to the preceding week’s figure of N32.82 billion.

As the trading week concluded, several stocks showcased remarkable positive rallies, which significantly bolstered overall market sentiment. Leading the charge was OANDO, with an astounding surge of 3 9 percent, closely trailed by BETAGLASS at 33 percent and MCNICHOLS at 25 percent. These exceptional performances undoubtedly caught the attention of value investors.

In contrast, CORNERST faced a downturn of 11 percent, while VITAFOAM and MORISON experienced respective declines of 9 percent and 10 percent due to adverse price movements.

Experts say in the upcoming week, market sentiment is likely to be diverse as investors engage in bargain hunting ahead of the highly anticipated half-year earnings reports.

Meanwhile, in the Nigerian foreign exchange market last week, the Naira showed resilience at the official market against the US dollar, benefiting from reduced demand pressure.

In addition, the Central Bank of Nigeria announced a plan to clear nearly $2.5 billion in forex backlogs within the next two weeks.

The move, believed to have impacted the market significantly, indicates an impending increase in the supply of foreign exchange into the market, which, in turn, is expected to strengthen the local currency.

By the close of the trading week, the Naira appreciated by an impressive 2.43 percent week-on week at the official market, closing at N722.39/$1. However, the story was different in the parallel market, where the Naira depreciated by 1.31 percent week-on-week to N930/$1.

This depreciation was driven by the continued search for the dollar by forex users in alternative forex markets, given the limited supply from the apex bank.

Meanwhile, at the FMDQ Securities Exchange Futures Contract Market, the naira exhibited strength against the US dollar across various contract tenors.

Notably, forward rates appreciated by 1.40 percent, 1.48 percent, 1.56 percent, 1.78 percent, and 2.19 percent for the 1-month, 2-month, 3-month, 6-month, and 12-month contract tenors, respectively. This upward movement in forward rates was a result of decreased demand for the dollar across these various tenors.