Stock Market Appreciates by N62bn as Investors’ Sentiment Persist

The Nigerian equities market ended last week positively, gaining N62 billion in market capitalisation amid weak investors sentiment trading in some highly capitalised stocks.

The likes of MTN Nigeria Communication Plc rose by 1.7 per cent Wee-on-Week (WoW) to N241.90 per share, while Dangote Cement Plc appreciated by 1.16per cent WoW to N270 per share to bring the market capitalisation to N29.591trillion.

Similarly, the Nigerian Exchange Limited All-Share Index (NGX- ASI) advanced by 0.21 per cent W-o-W to close at 54,327.30 basis points.

Across the sectors last week, sentiment was largely downbeat for most of the indices as NGX Insurance, NGX Banking and NGX Consumer Goods indices lost 3.32 per cent, 0.9 per cent and 0.63 per cent week on week respectively.

On the other hand, price appreciation from buying momentum was witnessed in the NGX Oil & Gas index and the NGX Industrial Goods index with a gain of 0.63 per cent and 0.65 per cent week on week in that order.

The market breadth for the week was negative as 24 equities appreciated in price, 45 equities depreciated in price, while 88 equities remained unchanged. Tripple Gee and Company led the gainers table by 30.48 per cent to close at N1.37, per share. International Breweries followed with a gain of 25.25 per cent to close at N1.24, while Conoil went up by 20.94 per cent to close to N32.05, per share.

On the other side, FTN Cocoa Processors led the decliners table by 15.15 per cent to close at 28 kobo, per share. Prestige Assurance followed with a loss of 13.04 per cent to close at 40 kobo, while Japaul Gold & Ventures declined by 11.76 per cent to close at 30 kobo, per share.

Overall, a total turnover of turnover of 944.293 million shares worth N22.710 billion in 18,615 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 3.789 billion shares valued at N27.500 billion that exchanged hands previous week in 20,333 deals.

The Financial Services Industry (measured by volume) led the activity chart with 634.086 million shares valued at N6.442 billion traded in 8,540 deals; contributing 67.15 per cent and 28.37 per cent to the total equity turnover volume and value respectively.

The Consumer Goods Industry followed with 78.603 million shares worth N2.218 billion in 2,993 deals, while the Conglomerates Industry pulled a transaction of 59.564 million shares worth N110.109 million in 788 deals.

Trading in the top three equities; Guaranty Trust Holding Company (GTCO), Universal Insurance and Transnational Corporation (Transcorp) accounted for 269.288 million shares worth N2.999 billion in 1,845 deals, contributing 28.52 per cent and 13.21 per cent to the total equity turnover volume and value respectively.

However, analysts expected positive sentiment to persist on the stock market of the NGX this week as investors continue to take refuge in safe haven stocks.

They are of the view that market players are looking forward to full-year audited results of listed companies with December year-end to start rolling in any moment from next week. Just as January inflation report is also expected to hit the market next week.

This is due to ongoing earnings season and high dividend to hedge against inflation, looking at the impressive numbers that are expected to support higher payout or dividend growth in this season, despite the increasing electioneering activities national assembly election.

Looking ahead into the new week, Cowry Assets Management Limited expected the current trend of positive sentiment to take grip of market activities in the face of portfolio rebalancing and profit taking activities and on the back of the outcome from the recent T-bills auction as rates inched lower further in the fixed income space.

“However, we advise investors to trade companies with sound fundamentals and, as such, should take advantage of price corrections in line with domestic and global trends,” they said.

Cordros Securities Limited stated that “in the subsequent weeks, we expect the NGX to be flooded with corporate earnings as more companies publish 2022 full year numbers, which will be accompanied by dividend declarations.

“We believe this should provide a catalyst for buying activities even as risk-averse investors are likely to remain cautious due to medium-term expectations of an uptick in FI yields. Overall, we advise investors to seek trading opportunities in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.”