The Nigerian equities market sustained its bullish momentum during the week, closing three out of five sessions in positive territory. The NGX All-Share Index (ASI) rose by 2.0% week-on-week (w/w) to close at 108,053.95 points, driven by renewed investor confidence and strategic positioning ahead of FY 2024 dividend declarations 510. Market capitalisation surged by 2.78% w/w to ₦67.418 trillion, while the year-to-date (YTD) return climbed to 4.98%.
Trading activity, however, moderated, with total turnover declining to 2.41 billion shares valued at ₦55.51 billion across 80,988 deals, compared to 3.05 billion shares worth ₦98.35 billion in the prior week. This reflects a 20.6% drop in average daily volume and a 43.3% decline in value traded, signalling cautious profit-taking in select sectors.
Market Breadth Improves, Activity Levels Moderate
Market breadth strengthened significantly, with 65 gainers outnumbering 31 decliners, resulting in a market breadth of 0.6x, an improvement from the previous week’s 0.4x. This indicates a more optimistic market sentiment. However, trading activity moderated this week, with both average volume and value traded declining by 20.6% and 43.3%, respectively. This could be attributed to profit-taking activities and a cautious approach by some investors.
Read Also: WAEC Releases 2024 Second Series WASSCE Results, 67.55% Pass Rate Achieved
Sectoral Performance
Sectoral performance was divergent, with three indices advancing and three declining:
- Industrial Goods (+10.0% w/w): Led by Dangote Cement (+21.8%) and Beta Glass (+10.1%), buoyed by strong institutional demand 712.
- Insurance (+2.5% w/w): Gains in Cornerstone Insurance (+5.2%) and SUNU Assurance (+27.9%) offset profit-taking in AIICO and Lasaco.
- AFR-ICT (+1.4% w/w): Supported by MTNN (+3.6%) and CWG (+3.6%).
Declining Sectors:
- Consumer Goods (-3.6% w/w): Sell-offs in BUA Foods (-10.0%) and Golden Guinea Breweries (-10.0%).
- Oil & Gas (-2.3% w/w): Weakness in Oando (-0.8%) and Conoil (-1.9%).
- Banking (-0.2% w/w): Pressure on FBNH (-1.7%) and UBA (-1.1%).
Investor Sentiment
Market breadth improved to 0.6x (vs. 0.4x last week), with 65 gainers, 31 decliners, and 54 unchanged stocks.
Top Gainers:
- Dangote Cement (+21.8%): Driven by post-earnings optimism and institutional accumulation.
- Transcorp Hotels (+11.1%): Benefiting from renewed hospitality sector demand.
- Beta Glass (+10.1%): Strong Q4 earnings anticipation.
Top Decliners:
- BUA Foods (-10.0%): Profit-taking after a rally.
- Golden Guinea Breweries (-10.0%): Weak consumer spending outlook.
- FBNH (-1.7%): Liquidity constraints and sector rotation.
Key Market Drivers
Corporate Actions: Zenith Bank’s 9.67 billion new shares were listed, expanding its market presence after a 160.5% oversubscribed hybrid offer.
Global Cues: Improved sentiment linked to U.S. economic resilience and pro-growth policies under the Trump administration indirectly bolstered frontier market appetite.
Dividend Positioning: Investors accumulated stocks like DANGCEM and MTNN ahead of FY 2024 dividend announcements.
Foreign Exchange
The Naira stabilised at ₦1,510.10/1 in the official market (NAFEM) but appreciated to ₦1,565/1 in the parallel market 2. Cryptocurrencies, including Bitcoin (+2.1%) and Ethereum (+5.4%), rallied on ETF optimism, though this had limited direct impact on equities.
Outlook
Experts believe positive momentum in the equities market is expected to continue in the coming week. As we approach the dividend season, investors are likely to reassess their portfolios and focus on companies with strong earnings performances and attractive dividend yields. Furthermore, the ongoing release of corporate earnings results will continue to shape market sentiment. Profit-taking is expected in consumer goods to shift capital into insurance and ICT stocks. Currency volatility and geopolitical tensions could temper gains.
The NGX’s resilience underscores improving macroeconomic fundamentals and investor confidence. While sectoral rotations may drive volatility, strategic positioning in high-yield stocks and sectors with earnings momentum remains critical for alpha generation.
