The Nigerian equities market extended its bullish momentum for the second consecutive week in February, as improved corporate performance across sectors lifted market capitalisation by N1.3 billion.
Last week, the all-share index (ASI) rose by 2 per cent week-on-week to close at 108,053.95 points from 105,891.33 recorded when the market reopened for transactions on Monday. Similarly, the market capitalisation of listed equities soared by N1.35 trillion from N66.07 trillion to N67.42 trillion.
This significant rise in market capitalisation last week was largely driven by strong earnings reports across various sectors. For instance, Presco Plc, FBN Holdings Plc and MTN Nigeria reported strong earnings, leading to significant stock price appreciation.
Presco Plc saw a 19.8 per cent increase in stock price last week while First Hold Co Plc gained 10.2 per cent. MTN Nigeria’s stock price also rose by two per cent.
The positive corporate earnings report also led to heightened investor sentiment, resulting in increased trading volumes. The financial services industry, for instance, led in trading volume with 2.26 billion shares valued at N52.19 billion traded in 33,724 deals, contributing 74.08 per cent to the total equity turnover volume.
These factors collectively propelled the NGX’s market capitalisation upward, boosting investor confidence and attracting more investments into the market reflecting the positive impact of improved corporate performance on the NGX.
Consequently, the year-to-date return of the index climbed to 4.98 per cent, with the exchange recording 64 gainers against 32 losers, resulting in a positive market breadth.
Across the sectors, market performance was mixed, with three sectors closing positive while three sectors ended in the red.
The NGX-Industrial Index led the gainers, surging by 10.4 per cent week-on-week, followed by the NGX-Insurance Index (+2.52 per cent) and the NGX-Commodity Index (+0.43 per cent). The gainers in these sectors include Dangote Cement, UPDC, Beta Glass, SUNU Assurance, Presco, Transcorp Power and Custodian.
However, the NGX-Consumer Goods Index led the losers chart, shedding 3.63 per cent week-on-week, followed by the NGX-Oil and Gas index and NGX-Banking which also depreciated by 2.3 per cent and 0.24 per cent indices.
These losses were driven by selloffs in Aradel Holdings, Zenith Bank, BUA Foods, Julius Berger, Conoil and FBN Holdings, as investors engaged in portfolio rebalancing.
Reacting to the market outlook, analysts at Cowry Asset Management Limited said: “Looking ahead, we anticipate a mixed market sentiment in the coming week as investors await further corporate earnings releases and dividend declarations.
“Additionally, market participants will closely monitor the newly rebased Consumer Price Index (CPI) data and the outcome of the Monetary Policy Committee (MPC) meeting scheduled for Wednesday and Thursday.
“These key events will provide direction for investors as they assess the potential impact on their portfolios. We advise investors to remain vigilant, keeping an eye on stocks with strong fundamentals to make informed investment decisions.”
Cordros Capital said: “Next week (this week), we expect market sentiment to be driven by more corporate earnings updates as well as key economic data releases and policy decisions, with a particular focus on January inflation figures and CBN’s monetary policy decision.”
The financial services industry (measured by volume) led the activity chart with 1.4 billion shares valued at N24 billion traded in 31,919 deals; thus contributing 57.9 per cent to the total equity turnover volume.
The services industry followed with 247 million shares worth N1.2 billion in 6,277 deals. The consumer goods industry ranked third with a turnover of 153.8 million shares worth N3.9 billion in 8,405 deals.
Trading in the top three equities namely Sterling Financial Holdings Company Plc, Access Holdings Plc and Secure Electronic Technology Plc (measured by volume) accounted for 455.4 million shares worth N5.3 billion in 6,654 deals, contributing 18.9 per cent to the total equity turnover.
In addition, Honeywell Flour and UPDC emerged as the top-performing stocks for the week, adding 47.1 per cent and 45.9 per cent, respectively while VFD Group followed with a 30.6 per cent gain, SUNU Assurance and Ikeja Hotel advanced by 27.9 per cent and 24.4 per cent, respectively.On the losers’ chart, DAAR Communications was the worst-performing stock, declining by 13.6 per cent while International Energy Insurance followed by 10.8 per cent. BUA Foods, Golden Breweries and Eunisell also trailed with 10 per cent, 9.9 per cent and 9.7 per cent.
