The Nigerian equities market sustained its positive momentum for the third consecutive week, leading to 26.43 percent investors’ Year-till-Date return on investment.
The equities market closed last week having gained 13.84 percent Week-on-Week (WoW) to close at 94,538.12 basis points as investors buying interest drove the biggest weekly gains on the domestic bourse in nine years.
As a result, overall market capitalisation expanded by N6.29 trillion to close the week at N51.735 trillion.
Across the sectoral performance was largely bullish. The NGX Industrial Goods index recorded the most significant weekly gain of 46.9 percent. NGX Insurance index followed with a weekly gain of 14.9 percent, while NGX Oil & Gas and NGX Consumer Goods indices rose by 8.8 percent and 8.2 percent W-o-W. The NGX Banking index was the sole loser for the week by a 0.1 percent decline.
The market breadth for the week was positive as 81 equities appreciated, 58 equities depreciated, while 16 equities remained unchanged. The Initiates Plc led the gainers table by 59.78 percent to close at N2.94, per share. Dangote Cement followed with a gain of 53.94 percent to close at N538.80, while Honeywell Flour Mill went up by 50.77 percent to close to N5.85, per share.
On the other side, Royal Exchange led the decliners table by 22.45 percent to close at 76 kobo, per share. Ikeja Hotel followed with a loss of 10.57 percent to close at N7.70, while Linkage Assurance declined by 8.16 percent to close at N1.35, per share.
Overall, a total turnover of 5.179 billion shares worth N77.797 billion in 79,012 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 5.719 billion shares valued at N88.828 billion that exchanged hands the prior week in 80,064 deals.
However, analysts have anticipated Nigerian stock market dynamics for the new week include a mix of sentiments, profit-taking activities, and the ongoing presence of bargain hunters, all unfolding against the backdrop of expectations for the unaudited fourth quarter (Q4) 2023 financial results.
The local stock market has exhibited robust bullish momentum, fueled by heightened buying interest in bellwether stocks and those with strong fundamentals. This remarkable surge was underpinned by continued funds inflow, reflecting portfolio repositioning in response to recent macroeconomic data indicating nearly a three-decade high in consumer price inflation. Despite below-average traded volumes, several tickers reached new 52-week highs.
Analysts at Cowry Assets Management Limited said that “the All-Share Index (ASI) current movement pattern indicates that the market is persistently in the overbought region according to the RSI, with stock valuations and prices significantly exceeding intrinsic values.
“This signals a potential imminent pullback, suggesting the market requires a correction in the short term. Anticipated market dynamics for the upcoming week include a mix of sentiments, profit-taking activities, and the ongoing presence of bargain hunters, all unfolding against the backdrop of expectations for unaudited Q4, 2023 financial results.
“Furthermore, market participants are gearing up for heightened volatility, especially with the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) deferring its January meeting until February 2024.
“Investors will closely monitor these factors for potential shifts in market conditions. Amidst all these, we continue to advise investors to take a position in stocks with consistent track records of dividend payments and strong fundamentals and growth prospects to support earnings growth.”
Analysts at Cordros Securities Limited stated 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.”
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