Equities Market Sustains Positive Trend With N183bn Gains
The bullish trend persisted on the equities market of the Nigerian Exchange Limited (NGX) for the third consecutive week, with investors showing interest in largely capitalised stocks; MTN Nigeria Communications (MTN), Seplat Energy, and Airtel Africa propelling the stock market increase.
The NGX All-Share Index ended the week 0.37 percent higher to close at 71,112.99 basis points. Similarly, market capitalisation gained N183 billion week-on-week (W-o-W) to close at N39.108 trillion.
Meanwhile, sectoral performance was mixed, with gains observed in the NGX Oil and Gas, NGX Insurance, and NGX Consumer Goods indices by 2.6 percent, 0.9 percent, and 0.2 percent respectively. On the other hand, the NGX Industrial Goods index declined by 1.2 percent, while the NGX Banking index remained unchanged.
The market breadth for the week was positive as 54 equities appreciated in price, 30 equities depreciated in price, while 72 equities remained unchanged. Deap Capital Management & Trust led the gainer’s table by 54.84 percent to close at 48 kobo, per share. C & I Leasing followed with a gain of 49.55 percent to close at N4.98, while MeCure Industries went up by 46.17 percent to close to N5.72, per share.
On the other side, Japaul Gold & Ventures led the decliners table by 14.14 percent to close at N1.70, per share. Beta Glass followed with a loss of 9.92 percent to close at N54.00, while The Initiates Plc (TIP) declined by 9.80 percent to close at 92 kobo, per share.
Overall, a total turnover of 2.025 billion shares worth N27.693 billion in 32,763 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 2.525 billion shares valued at N45.297 billion that exchanged hands the previous week in 32,815 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.202 billion shares valued at N11.481 billion traded in 12,775 deals; contributing 59.38 percent and 41.46 percent to the total equity turnover volume and value respectively. The Oil and Gas Industry followed with 328.656 million shares worth N3.163 billion in 4,713 deals, while the Services Industry traded a turnover of 131.249 million shares worth N539.745 million in 2,263 deals.
Trading in the top three equities; Japual Gold and Venture, Fidelity Bank andJaiz Bank (measured by volume) accounted for 488.181 million shares worth N1.967 billion in 3,136 deals, contributing 24.11 percent and 7.10 percent to the total equity turnover volume and value respectively.
Capital market analysts expected modest gains in the equities market, as investors reacted to the outcome of the MPC meeting.
The market’s focus is now shifting towards the eagerly anticipated release of the Q3 GDP figures and the outcomes of the upcoming Monetary Policy Committee (MPC) meeting, both of which are expected to provide crucial insights into fund flow dynamics and the potential market trajectory.
Notably, the inflationary pressures, as reflected in the recent data, have added an extra layer of complexity to market dynamics. Investors are keenly observing how these factors, coupled with the year-end seasonality, will influence market sentiment.
The third quarter brought impressive corporate earnings, complemented by rising yields in the fixed-income market. This dual scenario presents a mixed bag of opportunities and challenges for equity investors.
According to Cordros Securities Limited, “We believe investors will closely monitor the results of the upcoming MPC meeting next week to gain further clarity on the movement of yields in the FI market.”
“As a result, we anticipate cautious trading on the local bourse. Overall, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.”
Looking ahead, analysts at Cowry Assets Management Limited anticipated “the prevailing bullish momentum to persist. Market participants are expected to target dividend-paying stocks, driven by profit-taking and portfolio rebalancing. This strategy is influenced by better-than-expected corporate performance and the allure of high yields.
“However, all eyes remain on the Monetary Policy Committee meeting, scheduled towards the end of the month, as it is poised to provide crucial policy statements and further direction for the market. Meanwhile, we continue to advise investors on taking positions in stocks with sound fundamentals.”