BY FESTUS OKOROMADU
The Nigerian capital market experienced a sustained surge in buying interest during the week ended November 3, 2023. Investors showed particular preference in large-cap stocks and blue-chip companies propelled by high sentiment that gave rise to a bullish trend in the market.
Primarily, the surge was driven by several factors, including the release of impressive Q3 financial reports and earnings, attractive valuations in some stocks, and the resulting high investor confidence.
Consequently, the Nigerian Exchange Limited benchmark index advanced by 4.56 percent on a week-on-week basis, reaching a historic level of 70,196.77 points.
This marked a significant milestone as it crossed the psychological threshold of 70,000. The overall market capitalization on the NGX also saw an increase, inching higher to N38.56 trillion.
Trading activities in the market during the week under review was marked by strong corporate earnings reports; equity investors witnessed significant gains, with the market recording an increase of N1.67 trillion in gains while the year-to-date return for the market also saw a further increase, reaching 36.97 percent.
Notable contributors to this impressive rally included stocks like AIRTELAFRI, SEPLAT, JAPAULGOLD, FBN Holdings, UBA, and STANBIC, which collectively contributed to the bullish momentum in the market.
The performance of various sectors during the week was predominantly bullish, with four out of the five tracked sectors showing positive advancements.
These gains were largely attributed to strategic position-taking and strong buying activities. The Insurance, Banking, Industrial, and Consumer Goods indexes experienced week-on-week increases of 7.96 percent, 2.67 percent, 0.73 percent, and 0.47 percent, respectively.
Positive price movements in stocks like TANTALIZER, AIRTELAFRI, MBENEFIT, UBA, STANBIC, and GEREGU PLC played a significant role in driving the bullish momentum in these sectors.
However, the Oil & Gas index remained largely unchanged during the week, despite notable upticks in SEPLAT and ETERNA.
The trading activity during the week painted a positive picture, with a 31.20 percent week-on-week increase in the weekly deal count, reaching 37,959 deals. The average traded volume also witnessed a significant surge of 69.52 percent, totaling 2.45 billion units, while the weekly average value increased by 59.61 percent week-on-week, amounting to N40.57 billion.
Key performers at the close of the week included stocks like MBENEFIT, JAPAULGOLD, AIRTELAFRI, OMATEK, and CADBURY. These stocks posted remarkable gains of 29.27 percent, 28.28 percent, 27.85 percent, 27.27 percent, and 25.00 percent, respectively, on a week-on-week basis, despite the market’s inherent volatility. Conversely, some stocks, including ELLAHLAKES, RT BRISCOE, BETA GLASS, MEYER, and ABBEYBDS, experienced declines in their share prices, with losses ranging from 21.96 percent to 9.71 percent on a week-on-week basis.
Meanwhile, market analysts from Cowry Asset Management Company Limited have expressed optimism that the market will continue on the bullish trend this week, but stressed the need for investors to take positions in stocks with strong fundamentals.
“Cowry Research expects the prevailing bullish momentum to persist, with dividend qualification dates drawing closer. Equity investors are expected to position themselves in dividend-paying stocks.
“Additionally, some portfolio rebalancing is anticipated; driven by better-than-expected corporate financial results released thus far, sector rotation dynamics, and a relatively weak manufacturing PMI for October. Meanwhile, we continue to advise investors on taking positions in stocks with sound fundamentals,” Cowry Asset Management Company Limited stated in their weekly report.
