The Nigerian equities market closed the year 2023 on a positive trend having created wealth for smart investors who took advantage of its bullish activity throughout the year.
Trading on the last week of the year continued on a positive trend recording 1.01 percent weekly and 4.78 percent monthly gains and as well achieving a benchmark index of 74,773.77 basis points on Friday last week even as it earlier set an all-time new high of 74,850.26 basis points during the week.
This upward momentum, triggered by year-end window dressing, reflected a robust demand for financial services and fundamentally sound stocks, setting the stage for a year-end rally. The positive sentiment, buoyed by market breadth and increased volumes, signifies a sustained bull run during the markup phase and ongoing portfolio rebalancing in anticipation of the 2024 earnings reporting and dividend season.
The year closed on a remarkable note as the last week witnessed market highs as well as surpassed historical thresholds, culminating in a bullish trajectory.
In summary, the Nigerian Exchange Limited finished the year, up as the All-Share Index gained 45.90 percent year-on-year translating to the fourth consecutive annual gain, while the market capitalization experienced a 1.01 percent week-on-week increase, reaching N40.92 trillion.
Cumulatively, equity investors gained N410.7 billion over two of three trading sessions, contributing to an impressive N13 trillion gain in 2023.
Reviewing sectorial transactions for the week, it was observed that the bullish trend was evident, with significant advancements in the financial services sector.
Banking and Insurance stocks led gainers by 1.08 percent and 8.19 percent, respectively, attributed to price appreciations in institutions such as JAIZBANK, GTCO, STANBIC, FIDELITYBNK, and insurance firms like CONHALLPLC, MANSARD, and PRESTIGE.
The Industrial and Oil & Gas indexes also recorded appreciations of 0.01 percent and 0.37 percent, driven by a surge in buying interest in select counters like MULTIVERSE, IMG, JBERGER, and ETERNA.
However, the Consumer Goods index faced a minor setback of 1.46 percent, driven by notable price declines in TANTALIZER, BUAFOODS, NESTLE, and FLOURMILL.
Market activity, however, experienced a lackluster mood compared to the previous week, with a 52.06 percent decrease in total traded volume to 1.19 billion units.
The number of trades nosedived by 33.14 percent to 23,969 deals, and the weekly traded value experienced a significant decline of 41.58 percent week-on-week, closing at N31.43 billion.
Top gaining stocks at the week’s close included MULTIVERSE, IMG, INFINITY, DAARCOMM, and IKEJAHOTEL, securing gains of 33 percent, 33 percent, 32 percent, 29 percent, and 22 percent, respectively.
Conversely, DEAPCAP, UACN, NAHCO, and OANDO faced declines in their share prices on a week-on-week basis, shedding 16 percent, 14 percent, 5 percent, and 3 percent, respectively.
Meanwhile, this week marks the commencement of the new trading month and the year 2024 with investors anticipating positive policy reforms from economic drivers.
According to financial analysts from Cowry Management Assets Limited, investors are expected to exhibit a pervasive bullish sentiment during the week as they position themselves for the New Year through sectoral portfolio rebalancing.
“With the January effect in play, investors are expected to engage in profit-taking and bargain hunting for dividend-paying stocks as the reporting and earnings season approaches. The strategic reallocation of funds among sectors and adjustments in portfolios to align with changing market conditions are likely to shape trading activities, reflecting investors’ pursuit of optimal risk-return profiles and capitalizing on emerging opportunities.
“Amidst all these, we maintain our advice to investors on taking positions in stocks with sound fundamentals and whose earnings yield and earnings per share support higher payout ratio,” the Cowry Research report for the week stated.
