Taofik Salako, Capital Market Editor
THE stock market shot to the top of the global stock markets at the weekend with a whopping N1.18 trillion return, representing the highest weekly gain in two years.
The equities closed weekend with an average return of 9.07 per cent to become world’s best performing stock market for the week. The average return of 9.07 per cent implied capital gains of N1.18 trillion within the five trading days. Nigerian equities have sustained consecutive positive trading session so far this year; with average year-to-date return standing at 9.59 per cent, equivalent to net capital gains of N1.24 trillion.
The benchmark index for the Nigerian stock market, the All Share Index (ASI) of the Nigerian Stock Exchange (NSE), jumped three steps to close weekend at 29,415.39 points as against its week’s opening index of 26,968.79 points. The ASI- a value-based index, tracks the share prices of all quoted equities at the NSE.
Nigeria was exceptionally outstanding in a global market dominated by modest gains. Global equity indices showed appreciable gains amidst deescalating political and economic risks. From America to Europe, Asia, Middle East and Africa, most quoted shares showed positive sentiment. United States’ Dow Jones Industrial Average (DJIA), S & P 500 Index and NASDAQ Index rose by 1.1 per cent, 1.2 per cent and 2.3 per cent respectively.
Europe-tracking Euro Stoxx appreciated by 0.7 per cent. Emerging markets’ MSCI EM Index posted average gain of 0.4 per cent. The MSCI FM Index, which tracks frontier markets, closed positive with a gain of 0.5 per cent. Germany’s XETRA DAX Index rose by 2.3 per cent. Japan’s NIKKEI 225 Index appreciated by 0.8 per cent. Hong Kong’s Hang Seng Index posted a return of 0.7 per cent. Russia’s RTS Index rose by 2.7 per cent. China’s Shanghai Composite Index inched up by 0.3 per cent.
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The sustained rally since trading started in 2020 signaled a major recovery for Nigerian investors, after the equities market lost about N1.71 trillion in 2019. Nigerian equities closed 2019 with negative average full-year return of -14.60 per cent. It had recorded negative average full-year return of -17.81 per cent in 2018.
Aggregate market value of all quoted shares on the NSE rose from its opening value of N13.020 trillion to close weekend at N15.175 trillion. Market capitalisation was boosted by the listing of BUA Cement Plc, which added additional N1.2 trillion in primary listing value. The ASI had opened this year at 26,842.07 while aggregate market capitalisation of quoted equities opened at N12.958 trillion.
Most analysts expected the rally at the Nigerian equities market to continue as investors step up bargain-hunting ahead of the earnings season.
“We believe that the bullish momentum would continue as investors sustain interest in the market,” Afrinvest Securities stated.
Analysts at Cordros Securities noted that while profit-taking activities may moderate market performance, there is still significant headroom for the rally to continue.
“Looking ahead, while we expect profit-takers to dominate activities in the coming week, we still see significant legroom for a further rally as the elevated maturities from fixed income instruments hunt for investment vehicles. Nonetheless, we advise investors to cherry-pick fundamentally sound stocks,” Cordros Securities stated.
Total turnover last week stood at 2.68 billion shares worth N32.65 billion in 30,956 deals, a considerable increase on a total of 2.31 billion shares valued at N21.68 billion traded in 14,906 deals two weeks ago.
The banking-led financial services sector continued to dominate activity chart with 2.04 billion shares valued at N18.59 billion in 18,876 deals; representing 75.87 per cent and 56.95 per cent of the total equity turnover volume and value respectively. Conglomerates sector followed with 225.72 million shares worth N504.12 million in 1,217 deals while the consumer goods sector placed third with a turnover of 123.38 million shares worth N3.12 billion in 3,403 deals.
The three most active stocks were United Bank for Africa Plc, Zenith Bank Plc and Wapic Insurance Plc, which altogether accounted for 934.66 million shares worth N10.93 billion in 7,194 deals, representing 34.84 per cent and 33.46 per cent of the total equity turnover volume and value respectively.
Also, a total of 15,390 units of Exchange Traded Products (ETPs) valued at N13.095 million were traded in 32 deals compared with a total of 4,033 units valued at N4.233 million traded in 26 deals two weeks ago.
In the sovereign bond market, a total of 64,840 units of Federal Government bonds valued at N71.36 million were traded in 30 deals compared with a total of 204,300 units valued at N237.21 million traded in four deals.
There were 51 gainers to 20 losers last week as against 44 gainers and 24 losers recorded in the previous week. Sectoral indices showed a generally positive sentiment with the exception of the NSE Oil and Gas Index, which dropped by 0.02 per cent. The NSE Banking Index posted average gain of 8.36 per cent for the week. The NSE Insurance Index rose by 2.05 per cent. The NSE Consumer Goods Index rallied by 0.82 per cent. The NSE Industrial Goods Index recorded the highest gain of 22.27 per cent while the NSE 30 Index, which tracks 30 largest stocks, rose by 10.18 per cent. Dangote Cement recorded the highest gain of 21.13 per cent to close at N172 while UPDC Real Estate Investment Trust led the decliners with a loss of 18.6 per cent to close at N3.50 per share.
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