Nigerian Exchange Sees Significant Growth
The Nigerian stock market surged last week, with the Nigerian Exchange (NGX) gaining approximately N438 billion. This growth was driven by strong earnings from Tier-1 banks, boosting investor sentiment. The benchmark All-Share Index (ASI) climbed by 0.66%, closing at 105,660.64 points on a week-on-week basis. This marks a significant recovery after the market had been in decline.
Banking Sector Drives Market Confidence
The uptrend was largely due to corporate actions in the banking sector. Several major banks released their 2024 full-year audited earnings, showing strong performance and offering attractive dividends. These disclosures spurred investor confidence, resulting in increased participation in the market. In addition, portfolio rebalancing and window-dressing activities contributed to the positive trend.
Trading Activity and Investor Sentiment
Investor optimism was reflected in the market’s year-to-date (YTD) return of 2.66%. Trading activity saw a sharp increase, with the number of transactions rising by 7.48% to 61,309 deals. The volume of shares traded jumped by 159.2% to 7.52 billion units. The total value of traded equities soared by 730.04%, reaching N398.95 billion.
Sector Performance Overview
The sector performance during the week was mostly positive. The banking sector was the top performer, advancing by 4.28%. Investor interest in stocks like GTCO, FCMB, FIDELITYBNK, and FIRSTHOLDCO helped drive this growth. The insurance sector followed closely, gaining 3.21%. The Consumer Goods and NGX Industrial indices saw modest gains of 0.12% and 0.01%, respectively.
Oil & Gas and Commodity Sectors Struggle
The Oil & Gas Index faced a 1.63% decline. This drop was largely due to sell-offs in key stocks like ETERNA, OANDO, and ARADEL, amid concerns about fluctuating global oil prices. The Commodity Index also fell by 0.76%, reflecting some profit-taking.
Top Gainers and Decliners
Several stocks posted impressive gains during the week. MBENEFIT led with a 56.7% increase. Other notable gainers included SUNU Assurance (+33.3%), ABBEYBDS (+31.4%), ROYALEX (+31.3%), and ETRANZACT (+19.8%). On the flip side, AFRIPRUD was the worst performer, losing 60.5%. Other stocks such as CWG, JOHNHOLT, UHOMREIT, and UCAP also experienced declines.
Outlook for the Market
Cowry Asset Limited expects the bullish trend to continue as the market enters the full earnings season. Dividend announcements are expected to sustain investor interest in blue-chip stocks. However, portfolio rebalancing and profit-taking could lead to some volatility in the coming weeks.
Market Capitalisation Reaches N66.26 Trillion
The equities market capitalisation of the Nigerian Exchange rose by N437.5 billion, closing at N66.26 trillion. This marks a positive sign for the market as it continues its recovery.
