Nigerian equities are set for another record return as continuing bargain-hunting pushed average return so far in 2020 to 44.55 per cent, equivalent to net capital gains of N5.77 trillion. The recent highest return was 42.3 per cent recorded in 2017.
The All Share Index (ASI)- the value-based common index that tracks all share prices at the Nigerian Stock Exchange (NSE) opened yesterday at 38,800.01 points, 44.55 per cent above 26,842.07 points recorded as opening index for the year. The ASI had consolidated its rally with average gain of 5.42 per cent or net capital gain of N1.04 trillion in the four-day trading session last week.
Aggregate market value of all quoted equities at the NSE crossed the N20 trillion mark to open yesterday at N20.279 trillion as against N19.236 trillion recorded as opening value for last week. It had opened the year at N12.958 trillion.
Most market analysts said they expected the market to record further gains during this week, with strong indication that the bulls may ride over possible profit-taking transactions to push full-year return above the N6 trillion mark.
Nigerian equities traditionally play contrarian stocks during the last trading days of the year, reflecting the symbolic Santa Claus rally, a tendency for stock prices to go up in the week last week of the year mostly in anticipation of expected positioning for dividends by the first month of the New Year.
“As the year draws to a close, we expect yield-seeking investors to take positions in stocks with attractive dividend yields, in the face of increasingly negative real returns in the fixed income market. However, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings,” Cordros Securities said.
Analysts at Afrinvest Securities said they were “optimistic about a sustained positive run in the upcoming trading week”.
It was a four-day trading week as the Federal Government of Nigeria declared Friday 25th of December, 2020 as Public Holiday in commemoration of the Christmas Celebration.
Investors have stepped up activities in recent days with total turnover rising to 2.756 billion shares worth N40.311 billion in 17,459 deals last week as against a total of 1.893 billion shares valued at N17.647 billion traded in 20,660 deals two weeks ago.
The financial services sector led the activity chart with 2.106 billion shares valued at N19.454 billion traded in 8,327 deals; thus contributing 76.40 per cent and 48.26 per cent to the total equity turnover volume and value respectively. The consumer goods sector followed with 182.099 million shares worth N4.392 billion in 2,485 deals while the third place was industrial goods sector, with a turnover of 145.808 million shares worth N10.632 billion in 2,587 deals.
The three most active stocks were Access Bank Plc, Zenith Bank Plc and AXA Mansard Insurance Plc, which altogether accounted for 1.439 billion shares worth N13.881 billion in 2,972 deals, contributing 52.23 per cent and 34.44 per cent to the total equity turnover volume and value respectively.
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