The Nigerian local bourse demonstrated resilience in the second week of the year as the market recorded robust trading activities, thus extending its bullish trend to closing with a notable 4.24 percent gain, propelling the benchmark index to 83,042.96 points.
Investor sentiment soared on an above-average traded volume, reflecting a positive market breadth and a strong demand trend.
Market analysts say the surge is suggestive of strategic positioning amidst the ongoing portfolio repositioning for both dividend income and capital gains.
The market’s year-to-date return advanced to 11.06 percent, with the total market capitalization of listed equities climbing by 4.24 percent week on week to an impressive N45.44 trillion.
Aligning with this positive momentum, equity investors capitalized on the prevailing optimism, accumulating a substantial N1.85 trillion throughout four out of five trading sessions.
The bullish trend prevailed across various sectors during the week under review, with the financial services sector taking the lead.
Consumer goods, insurance, and banking stocks emerged as the frontrunners, registering increases of 9.60 percent, 7.63 percent, and 5.10 percent, respectively.
This uptick was driven by notable price appreciations in key institutions such as CADBURY, VERITASKAP, LINKASSURE, and MCNICHOLS.
Similarly, the industrial goods sector recorded a 4.80 percent increase, propelled by heightened buying interest in JBERGER, RT BRISCOE, and WAPCO.
However, the oil and gas index lagged behind due to sell sentiment witnessed in TOTAL.
Market activity throughout the week reflected a positive level of participation, mirroring the prior week’s trends.
Total traded volume surged by 72.25 percent, reaching a substantial 5.72 billion units.
The number of trades marked a notable uptick of 70.37 percent, totaling 80,064 deals.
Additionally, the weekly traded value witnessed an exceptional week-on-week rise of 112.74 percent, closing at a notable N88.83 billion.
Among the top-performing stocks at the week’s close were CADBURY (42 percent), VERITASKAP (39 percent), JBERGER (33 percent), JAIZBANK (31 percent), and LINKASSURE (28 percent).
In contrast, DAARCOMM, TOTAL, NEM, MAYBAKER, and FIDELITYBK faced declines in their share prices on a week-on-week basis, shedding 30 percent, 10 percent, 9 percent, 8 percent, and 6 percent, respectively.
Meanwhile, market analysts have expressed mixed feelings as to the prospect of the market in this new week.
For instance, while researchers at Cordros Securities Limited are optimistic that the market will remain bullish, those of Cowry Assets Limited think the market appears poised for a pullback in the short term.
“In the short term, we expect market performance to be dominated by the bulls, as positioning for 2023FY earnings releases and accompanying dividends declarations should outweigh profit-taking activities. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings,” say Cordros researchers
While their counterpart at Cowry Assets says, “We think the market promises a nuanced market environment, appearing poised for a potential pullback in the short term. Expectations include mixed sentiment, profit-taking, and the persistence of bargain hunters amidst anticipation of unaudited Q4 2023 financial results.
“Additionally, market participants will brace for volatility in light of the expected December Consumer Price Index (CPI) release and the impending Monetary Policy Committee (MPC) meeting in January. Amidst all these, we maintain our advice to investors on taking positions in stocks with sound fundamentals and whose earnings yield and earnings per share support higher payout ratio, while taking advantage of the price corrections in the market.”
