Last week, the Nigerian stock market ended on a positive note, with a N62 billion increase in market capitalization despite a lackluster sentiment among investors for some highly valued stocks. Companies such as MTN Nigeria Communication Plc saw a 1.7% week-over-week (WoW) rise to N241.90 per share, and Dangote Cement Plc increased by 1.16% WoW to N270 per share, contributing to a market capitalization of N29.591 trillion.

Similarly, the All-Share Index of the Nigerian Exchange Limited (NGX-ASI) increased by 0.21% week-over-week, ending at 54,327.30 basis points.

However, most sectoral indices showed a downbeat sentiment last week, with the NGX Insurance, NGX Banking, and NGX Consumer Goods indices losing 3.32%, 0.9%, and 0.63% week-over-week, respectively. In contrast, the NGX Oil & Gas and NGX Industrial Goods indices saw a boost from buying momentum, gaining 0.63% and 0.65% week-over-week, respectively.

The market breadth for the week was negative, with 24 stocks experiencing a rise in price, 45 stocks declining in value, and 88 stocks remaining unchanged. Tripple Gee and Company topped the gainers’ table with a 30.48% increase to close at N1.37 per share. International Breweries followed with a 25.25% gain to close at N1.24, while Conoil rose by 20.94% to close at N32.05 per share.

Conversely, FTN Cocoa Processors was the top decliner, losing 15.15% to close at 28 kobo per share. Prestige Assurance followed with a 13.04% decrease to close at 40 kobo, while Japaul Gold & Ventures declined by 11.76% to close at 30 kobo per share.

Overall, last week saw a total turnover of 944.293 million shares, worth N22.710 billion, traded by investors in 18,615 deals on the Exchange, in contrast to the previous week’s total of 3.789 billion shares worth N27.500 billion, traded in 20,333 deals.

The Financial Services Industry, as measured by volume, dominated the activity chart, with 634.086 million shares worth N6.442 billion traded in 8,540 deals, contributing 67.15% to the total equity turnover volume and 28.37% to the total value, respectively.

Analysts are anticipating a persistently positive outlook for the NGX (Nigerian Exchange Limited All-Share Index) this week as investors continue to seek refuge in safe-haven stocks. The anticipation is driven by the expected release of full-year audited results from listed companies with December year-end, as well as the January inflation report, both of which are expected to hit the market soon. The ongoing earnings season, combined with high dividends to hedge against inflation, is expected to support higher payouts or dividend growth, despite the increasing electioneering activities surrounding the national assembly election.

Cowry Assets Management Limited expects the current positive sentiment trend to persist due to portfolio rebalancing and profit-taking activities, as well as the outcome of the recent T-bills auction, where rates inched lower in the fixed-income space. However, the company advises investors to trade in companies with sound fundamentals and take advantage of price corrections in line with domestic and global trends.

Cordros Securities Limited stated that in the coming weeks, the NGX is expected to be flooded with corporate earnings as more companies publish their 2022 full-year numbers, which will be accompanied by dividend declarations. The company believes that this should provide a catalyst for buying activities, even as risk-averse investors remain cautious due to medium-term expectations of an uptick in FI yields. Cordros Securities Limited advises investors to seek trading opportunities only in fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.


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