The Nigerian equities market extended its bullish run for a second week as investors continued to cherry-pick stocks ahead of 2023 full-year earnings releases.
Accordingly, the All-Share Index advanced by 4.24 percent week-on-week (W-o-W) to close at 83,042.96 points. Also, investors gained N1.85 trillion W-o-W to close at N45.442 trillion.
Across various sectors, a bullish trend prevailed, as NGX Consumer Goods, NGX Insurance, and NGX Banking stocks emerged as the frontrunners, registering increases of 9.60 percent, 7.63 percent, and 5.10 percent, respectively W-o-W.
Similarly, the NGX Industrial Goods index recorded a weekly gain of 4.80 percent increase. However, the NGX Oil & Gas Index lagged, recording a weekly loss of 1.61 percent.
The market breadth for the week was positive as 75 equities appreciated, 23 equities depreciated, while 57 equities remained unchanged. Cadbury Nigeria led the gainers table by 42.31 percent to close at N24.05 per share. Veritas Kapital Assurance followed with a gain of 39.47 percent to close at 53 kobo, while Julius Berger went up by 32.94 percent to close to N56.50, per share.
On the other side, DAAR Communications led the decliners table by 30.23 percent to close at 90 kobo, per share. Totalenergies Marketing Nigeria followed with a loss of 10.00 percent to close at N346.50, while NEM Insurance declined by 9.45 percent to close at N5.75, per share.
Overall, a total turnover of 5.719 billion shares worth N88.828 billion in 80,064 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 3.320 billion shares valued at N41.755 billion that exchanged hands the prior week in 46,994 deals.
The Financial Services Industry (measured by volume) led the activity chart with 3.873 billion shares valued at N53.364 billion traded in 39,913 deals; contributing 67.72 per cent and 60.08 percent to the total equity turnover volume and value respectively.
The Conglomerates Industry followed with 725.490 million shares worth N9.886 billion in 7,658 deals, while the Oil and Gas Industry pulled a turnover of 223.240 million shares worth N2.690 billion in 4,464 deals.
Trading in the top three equities; Transnational Corporation (Transcorp), FCMB Group, and Fidelity Bank (measured by volume) accounted for 1.380 billion shares worth N17.741 billion in 12,442 deals, contributing 24.12 percent and 19.97 percent to the total equity turnover volume and value respectively.
However, capital market analysts have expected positive sentiments to continue as investors take position for the year.
The local bourse has demonstrated resilience since the beginning of the year. Investor sentiment soared on an above-average traded volume, reflecting a positive market breadth and a surge in buying sentiment. This surge is indicative of strategic positioning amidst the ongoing portfolio repositioning for both dividend income and capital gains.
Cordros Securities Limited said that “in the short term, we expect market performance to be dominated by the bulls, as positioning for 2023 full-year earnings releases and accompanying dividends declarations should outweigh profit-taking activities.
“Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.”
Looking ahead, analysts at Cowry Assets Management Limited said “We think the market promises a nuanced market environment, appearing poised for a potential pullback in the short term. Expectations include mixed sentiment, profit-taking, and the persistence of bargain hunters amidst anticipation of unaudited Q4 2023 financial results.
“Additionally, market participants will brace for volatility in light of the expected December Consumer Price Index (CPI) release and the impending Monetary Policy Committee (MPC) meeting in January. 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 a higher payout ratio, while taking advantage of the price corrections in the market.”
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