The local equities market experienced another positive week on the back of bargain hunting just as dividend income investors continue to position in anticipation of more corporate earnings without losing sight of the February CPI report which printed at 31.70 percent.
The investors also have to digest the outcome of the recent Nigerian Treasury Bills auction where there were slight declines in the stop rates.
Thus, the All-Share Index surged by an impressive 3.71 percent week on week, reaching 105,085.25 index points. In alignment with the ASI’s positive movement, the total market capitalization of listed equities experienced a robust 3.71 percent week-on-week increase, reaching N59.42 trillion.
This surge was propelled by renewed bullish sentiment in financial stocks on the back of expected corporate releases. Consequently, investors enjoyed a substantial year-to-date return of 40.54 percent, resulting in a collective wealth accretion of N2.12 trillion compared to the previous week’s N3.26 trillion.
This performance underscores the dynamic interplay of market forces amid evolving economic conditions. Despite the overall bullish sentiment and the upward repricing of select Nigerian stocks, trading activity witnessed a lacklustre performance throughout the week as the tally of weekly deals decelerated by 13.27 percent to 44,713 deals, while the average traded volume tanked by 17.80 percent week on week to 1.77 billion units.
Additionally, the weekly average value closed weakly by 51.42 percent week on week, reaching N52.87 billion, reflecting a downbeat in market participation amid rising investor interest.
The sectoral performance for the week displayed upbeat performance across most sectors, except for the OIL & GAS index, which recorded a modest loss of 0.11 percent week on week, attributed to the adverse price movements in OANDO and ETERNA. Conversely, the BANKING, INSURANCE, CONSUMER GOODS and INDUSTRIAL sectors experienced positive outings, gaining 12.84 percent, 2.52 percent, 1.41 percent and 0.20 percent week on week, respectively, due to upward movement in the prices of key stocks such as JBERGER, NEM, MTNN, GTCO, ZENITHBANK, ETI, FBNH, DANGSUGAR and ROYALEX.
Individual stock performances showcased remarkable achievements among gainers, with JBERGER, OMATEK, NEM, MTNN, GTCO, and FTNCOCOA leading the charts with share price advances of +31 percent, +23 percent, +21 percent, +21 percent, and +18 percent, respectively.
Conversely, INTENEGINS (27%), SUNO SASUR (19%), LASACO (15%), TRANSCORP (9%), and OANDO (4%) emerged as major losers, experiencing notable price declines week-on-week
Looking ahead, Cowry Research anticipates the prevailing bullish sentiment to persist in the market this week. This expectation is based on the anticipation by market players that more corporate releases with dividend announcements will hit the market even as players digest the recently published consumer price inflation report as well as the outcome of the recent treasury bills auction where it saw rates decline.
“Thus, it is expected that investors will take advantage of low valuations and the rebalancing of their portfolio. Meanwhile, we continue to advise investors on taking positions in stocks with sound fundamentals,” it added.
On the global scene, stocks posted mixed performances as investors digested the higher-than-anticipated US inflation print and the latest producer price index data for further clues on the path of the Federal Reserve interest rate cuts.
As of the time of writing, US equities (DJIA: +0.5%; S&P 500: +0.5%) were on track to close higher as investors turned their focus to a fresh batch of corporate earnings despite the latest inflation reading. Likewise, European equities (STOXX Europe: +0.6%; FTSE 100: +1.1%) rebounded from last week’s losses in response to a softer-than-expected UK employment report, which fueled expectations for interest rate cuts from the Bank of England later this year.
Elsewhere, in Asia (Nikkei 225: -2.5%; SSE: +0.3%), the Japanese market was weighed down by losses on semiconductor-linked shares amid increasing speculation that the Bank of Japan might end its negative interest rate cycle.
Conversely, the Chinese market posted a marginal gain following signs of a demand pickup in the economy and hopes of share buy-backs from listed companies. Lastly, the Emerging market (MSCI EM: +1.1%) and Frontier market (MSCI FM: +0.6%) indices posted gains driven by positive sentiments in China (+0.3%) and Vietnam (+1.1%), respectively.
