Stock market investors gain N4.30trn in a week as NGX ASI crosses 102,000 marks

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The Nigerian equities market experienced robust transactions throughout the week ended January 26, 2024 as investors showed strong sentiment towards some blue-chip stocks in what experts say is driven by anticipation for dividend earnings.

As a result, the market closed positively as the benchmark index of the Nigerian Exchange Limited All-Share-Index recorded a historic mark, surpassing the 100,000 mark to close at 102,401.88 basis points having gained 8.32 percent week on week.

The positive market breadth came on the heels of discerning investors taking due advantage of the upside potential and price movements in DANGCEM, SEPLAT, BUACEM, BUAFOODS and ETERNA respectively which witnessed immense investor sentiment during the week under review.

Market experts say the surge in the benchmark index was underpinned by continued funds inflow, reflecting the repositioning by market players on fundamentally sound stocks as a result of the last Nigerian Treasury Bills auction results where the stop rates trended higher and presented the equities market as a more attractive investment option.

Consequently, the total market capitalization of listed equities improved further by 8.32 percent week on week to close at N56.04 trillion as the year-to-date return strengthened to 36.95 percent and equity investors accumulated a substantial N4.30 trillion over the five trading sessions.

Sectoral analysis shows that the bulls took charge of three out of the five sectors in the market.

The Industrial index led the pack gaining 23.20 percent week-on-week to outperform others. The surge was driven by price increases and buy interest in DANGCEM and BUACEM.

The Industrial sector was trailed by the positive performances of the, Oil & Gas, and Consumer Goods Indexes which closed the week on a bullish note, rising by 11.57 percent and 5.29 percent respectively, fuelled by positive price movements in SEPLAT, JAPAULGOLD, ETERNA, BUAFOODS, NASCON and GEREGU.

In contrast, the banking and insurance indexes retreated by 1.63 percent and 4.10 percent week-on-week due to price declines in WEMABANK, GTCO, ROYALEX and CONHALLPLC.

Despite the overall positive performance, the market participation levels waned, mirroring the trend seen in the previous week.

Total traded volume declined by 42.44 percent to 2.98 billion units, while the number of trades dipped by 13.99 percent to 67,962 deals.

The weekly traded value also showed lackluster movement, dropping by 25.61 percent to N57.87 billion.

This comes on the back of waning sentiments triggered by expectation for a temporary pull back in the market.

At the close of the week, the top-performing stocks included TRIPPLE GEE, DANGCEM, SUNO SASUR, JAPAULGOLD, and SEPLAT which gained 32 percent, 29 percent, 25 percent, 23 percent and 21 percent respectively.

On the flip side, stocks such as VERITASKAP (23 percent) ROYALEX (22 percent), TIP (22 percent), CADBURY (21 percent) and DEAPCAP (19 percent) faced declines in their share prices, respectively.

Meanwhile, market analysts at Cowry Asset Management Limited say they anticipate the continuation of positive sentiments in the local stock market this week.
“The optimism is expected to persist as the market eagerly awaits more corporate earnings releases, which are poised to act as catalysts driving market activities.

“However, we foresee a mixed trend with a possibility of profit-taking. Investors are likely to engage in sectoral rotation, capitalizing on stocks that experience pullbacks to position themselves strategically. This rotation strategy is expected to create buying opportunities, especially in anticipation of upcoming releases from early filers in the corporate reporting season.

“Amidst all these, we continue to advise investors to take positions in stocks with consistent track records of dividend payments and strong fundamentals and growth prospects to support earnings growth,” Cowry Asset Researchers stated in their weekly report.