BY BAMIDELE FAMOOFO
Last week, the NGX benchmark index’s action was sustained in the bullish region for the seventh straight week with a 3.40 percent week on week gain to break the 62,000 strongholds to 63,040.87 points.
The bourse traded above its 200-Day Simple Moving Average on the weekly chart in the face of ongoing market-focused and economic reforms.
To this, the new trading quarter kick-started on a positive track as most stocks hit new 52-week highs as well as major sectors recording positive performances on strong buying interests among low, medium and high cap stocks, especially banking, consumer goods, telecom and others that pushed the index up.
As a result, the year-to-date gain stood at an impressive 23.00 percent, motivating investors and portfolio managers to engage in sectoral portfolio rebalancing ahead of the upcoming reporting and earning seasons.
Also, the market capitalisation mirrored the index’s upward trajectory, expanding by 3.40 percent week-on-week to reach N34.33 trillion. This growth indicates that equity investors have been capitalizing on the positive market sentiment, resulting in profit-taking worth N1.13 trillion.
The performance across sectors has predominantly been bullish, with the banking and oil & gas sectors emerging as the top gainers of the week. The banking sector exhibited an impressive weekly gain of 9.82 percent, while the oil & gas sector followed closely with a notable 7.18 percent increase.
The industrial goods sector also contributed positively to the overall market performance, closing the week with a 2.22 percent gain. The insurance sector experienced a marginal gain of 0.73 percent. However, the consumer goods sector emerged as the lone laggard, witnessing a slight decline of 0.22 percent after paring back its gains from the previous week.
Market activity displayed a robust and bullish momentum, evident in average traded volumes and deal brokerage. The number of weekly deals saw a significant improvement, surging by 93.91 percent week-on-week to reach 54,478, indicating an upswing in sentiment within the trading environment. Moreover, the average traded volume experienced a substantial advancement of 324.75 percent week-on-week, totaling 9.83 billion units. Additionally, the weekly average value expanded by 249.98 percent to N145.41 billion units, compared to N41.55 billion in the previous week.
Looking at the performance of specific stocks, several individual stocks stood out in terms of their performance during the week. JAPAULGOLD (+59%), CHAMS (+57%), and ETRANZACT (+46%) were the leading gainers, showcasing remarkable growth rates. Conversely, WAPIC (-27%), LASACO (-17%), and CHAMPION (-14%) were among the stocks that experienced declines, leading the laggards’ chart.
The index’s impressive gains, surpassing the 63,000 level, have not only propelled investor sentiment but also led to positive performances in major sectors such as banking and oil & gas. As we enter the new reporting and earning seasons, investors and portfolio managers are expected to engage in sectoral portfolio rebalancing. The market’s overall resilience and growth potential make it an attractive investment destination, with opportunities for both short-term gains and long-term capital appreciation.
As a result of the above, Analysts at Cowry Asset Limited look forward to a mixed outing and erratic profit taking, since factors that pushed the market to this level remain unchanged so far. Meanwhile, we continue to advise investors on taking positions in stocks with sound fundamentals.
In the Fixed Income market, investor sentiment turned bearish, leading to increased selling pressure on FGN bonds, as investors offered higher yields.
Notably, the 10-year, 16.29% FGN MAR 2027, and 20-year, 16.25% FGN APR 2037 bonds lost N3.76 and N0.32, respectively, while their corresponding yields climbed to 12.06% (from 10.91%) and 14.30% (from 14.25%), respectively. On the flip side, the 15- year, 12.50% FGN MAR 2035 debt held steady w/w at 14.40%, while the 30-year, 12.98% FGN MAR 2050 paper was repriced higher, yielding 14.55% (from 14.69%).
In the new week, experts expect local OTC bond prices to Increase (and yields to moderate) as prospective investors demand lower rates in line with rates in the primary market.
