Stock Market Appreciates by N894bn as Major Indicator Hits All-time High

The stock market appreciated by N894billion Week-on-Week (WoW) performance, pushing the market major indicator to a all-time of 74,000 basis points.

The Nigerian Exchange Limited All-Share Index (NGX ASI) advanced by 2.26 per cent W-o-W to close at 74,023.27 basis points as the stock sustained its positive momentum in 2023.

Consequently, market capitalization rose by N894 billion to close the week at  N40.507 trillion.

Across sectors, weekly performance was positive. The NGX Banking index recorded a weekly gain of 3.4 per cent, while NGX Insurance index rose by 1.7 per cent W-o-W.

NGX Industrial Goods index rose 0.3 per cent, while NGX Oil & Gas index up by 0.1 per cent W-o-W. Conversely, NGX Consumer Goods index close the week lower by 0.7 per cent.

The market breadth for the week was positive as 55 equities appreciated in price, 35 equities depreciated in price, while 65 equities remained unchanged. Infinity Trust Mortgage Bank led the gainers table by 60.64 per cent to close at N4.53, per share. DAAR Communications followed with a gain of 50 per cent to close at 69 kobo, while Multiverse Mining and Exploration went up by 41.25 per cent to close to N13.97, per share.

On the other side, Associated Bus Company led the decliners table by 16.48 per cent to close at 76 kobo, per share. Omatek Ventures followed with a loss of 12.33 per cent to close at 64 kobo, while e-Tranzact International declined by 12.32 per cent to close at N6.05, per share.

Overall, a total turnover of 2.474 billion shares worth N53.787 billion in 35,848 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 1.882 billion shares valued at N31.630 billion that exchanged hands last week in 33,020 deals.

The Financial Services Industry (measured by volume) led the activity chart with 1.756 billion shares valued at N24.641 billion traded in 17,589 deals; contributing 70.95 per cent and 45.81 per cent to the total equity turnover volume and value respectively. The Conglomerates Industry followed with 222.963 million shares worth N1.781 billion in 2,573 deals, while the Services Industry traded a turnover of 93.820 million shares worth N528.510 million in 2,166 deals.

Analysts have projected positive sentiment to linger on the Nigerian stock market In the final trading week of the year, as investors cherry-pick on fundamentally sound stocks.

The stock market performance has been on a positive trend. The impetus behind this positive trajectory was the heightened demand for financial services and blue-chip stocks, creating an environment conducive to the ongoing Santa Claus rally as the festive season approached.

The robust interest, particularly in high-priced equities, played a pivotal role in propelling the NGX All-Share index, characterized by substantial traded volumes and a positive market breadth. The bullish sentiment was a manifestation of the markup phase and a sustained bull run, a scenario heightened by the prevailing seasonality and the ongoing portfolio rebalancing ahead of the anticipated 2024 earnings reporting and dividend season.

This positive momentum coincided with shifts in market fundamentals and liquidity levels, indicating a dynamic landscape. The equity market not only achieved remarkable highs but also surpassed historical thresholds throughout the week. The bullish trajectory persisted amid nuanced market sentiments, with select stocks hitting new 52-week highs in the lead-up to the Christmas week.

Analysts at Afrinvest Limited stated that “in the final trading week of the year, we expect the positive sentiment to be sustained supported by year-end portfolio rebalancing exercise.”

Looking ahead to the week, analysts at Cowry Assets Management Limited anticipated the positive market trend to continue, investors are expected to engage in profit-taking and bargain hunting for dividend-paying stocks, driven by sector rotation and portfolio rebalancing.

“The market sentiment is expected to be buoyed by high expectations for robust full-year corporate financial results and the attractiveness of high yields, especially in a low-interest-rate environment. 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. 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,” analysts at Cowry added.