Stocks Surge After Q4 GDP Growth Report
Nigeria’s equities market resurged on Wednesday on the heels of a positive GDP report for the last quarter of 2022, indicating investor confidence in Africa’s second-largest economy despite general election threats.
The market has posted a significant 6 percent return on investments since the new year contrary to usual election-induced negative performance witnessed in previous years.
“Local institutional and retail investors are driving the market performance, and they have confidence in the state of the economy despite the general election which is much around the corner,” said Tajudeen Olayinka, a senior dealing member of the Nigerian Exchange.
The Chief Executive Officer of Wyoming Capital and Partners said that in the past when market activities were largely driven by foreign portfolio investors’ participation, election period is always remarkable for market decline.
However, barely four days to the general election stocks have maintained bullish sentiments with occasional bear threat occasioned by profit-taking activities.
Olayinka also attributed market strong performance to a growth report released by Nigeria’s statistics office (National Bureau of Statistics) which indicated that the country’s gross domestic product (GDP) grew by 3.52 percent in the fourth quarter of 2022, up from 2.25 percent in the third quarter of 2022 and 3.98 percent in the fourth quarter of 2021.
“Investors are comfortable with the growth figures for the last quarter of 2022 despite numerous global and domestic headwinds. It is a sign of better growth figures in the future, especially with the hope of a better incoming government,” Olayinka stated.
An analysis of Wednesday’s trading result indicated that buy an interest in Zenith Bank (+0.8%), GTCO (+0.8%), and Transnational Corporation (+4.2%) ACCESSCORP (+0.55%), and GEREGU (+10.00%) by bargain hunters drove benchmark All Share Index up by 0.2 percent to 54,315.53 points.
Consequently, the market year-to-date return improved to 6 percent (previously: 5.7%) and market capitalisation grew by ₦68.8 billion to ₦29.6 trillion.
Likewise, activity level advanced as volume and value traded rose 0.6 percent and 27.5 percent respectively to 129.8 million units and ₦3.9 billion.
Sectorial performance indices showed that two indices gained, one lost while AFR-ICT, Oil & Gas, and Industrial Goods indices all closed flat.
The Banking and Consumer Goods indices advanced 20 basis points and 1 basis point respectively due to buying an interest in ZENITH (+0.8%), STERLNBANK (+0.7%), and DANGSUGAR (+0.3%). The price decline in WAPIC Insurance (-6.8%) and Mutual Benefits (- 5.9%) dragged the Insurance index lower by 0.8 percent.
A total of 17 stocks gained, 11 declined while 82 closed flat.
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