The Nigerian stock market demonstrated a robust performance in the inaugural trading week of the year, marked by bullish sentiments and a formidable winning streak.
Trading activities started on a strong footing leading to the substantial 6.54 percent week-on-week growth, propelling the index to an impressive 79,664.66 points, tantalizingly close to breaching the psychologically significant 80,000-point threshold.
Analysis shows that the resurgence, driven by positive market breadth, was further fuelled by a fervent interest across stocks spanning diverse price ranges.
Emanating from what appears to be the January effect, this upward trajectory signifies a substantial demand for Nigerian stocks, setting the stage for the imminent reporting and dividend earning season.
Consequently, the opening week not only witnessed remarkable market highs but also surpassed historical benchmarks, culminating in an unmistakably bullish trajectory as the financial year kicked off on a notably positive note.
In tandem with the upward movement of the index, market capitalization experienced a commendable 6.54 percent week-on-week escalation, reaching a substantial N43.59 trillion. Equity investors, seizing the prevailing optimism, amassed a staggering N2.68 trillion over a mere four trading sessions, thereby contributing to a commendable 6.54 percent return for the index.
Across various sectors, the bullish trend manifested prominently, with the financial services sector, in particular, witnessing significant advancements.
The Banking and Insurance stocks led gainers, exhibiting increases of 10.29 percent and 14.08 percent, respectively. This surge in value was attributed to price appreciation in institutions such as UNITYBNK, GTCO, FIDELITYBNK, UBA, and noteworthy Insurance firms like AIICO, LINKASSURE, and SOVEREIGNS.
The Consumer Goods, Industrial Goods, and Oil & Gas indexes also recorded appreciations of 4.40 percent, 3.58 percent, and 3.00 percent, respectively. This uptrend was propelled by a surge in buying interest in select counters such as TRANSCORP, IKEJAHOTEL, DAARCOM, INFINITY, and ETERNA.
Market activity during the week reflected a heightened level of participation compared to the preceding week.
Total traded volume experienced an exceptional 179.92 percent surge, reaching a substantial 3.32 billion units. The number of trades marked a notable uptick of 96.06 percent, totaling 46,994 deals. Additionally, the weekly traded value witnessed a significant rise of 32.87 percent week-on-week, closing at a notable N41.75 billion.
Top-performing stocks at the close of the week included TRANSCORP (46 percent), IKEJAHOTEL (46 percent), AIICO (44 percent), DAARCOMM (43 percent), and STERLINGNG (34 percent). Conversely, CILEASING, CHAMPION, CADBURY, GUINNESS, and STANBIC faced declines in their share prices on a week-on-week basis, shedding 40 percent, 12 percent, 11 percent, 8 percent, and 6 percent, respectively.
Looking ahead into the new trading week, market analysts are optimistic that the market is poised for mixed sentiment, potentially influenced by profit-taking activities within the local market. As the NGX-ASI approaches the psychological threshold of 80,000+, market participants are expected to position themselves strategically and take considerable advantage of the price corrections.
However, the looming monetary policy committee meeting in January and the impending earnings and reporting season are anticipated to be pivotal factors shaping market dynamics in the near term.
Amidst all these, it is advisable that investors take positions in stocks with sound fundamentals and whose earnings yield and earnings per share support higher payout ratio, while taking advantage of the price corrections in the market.
