The activities of investors in the Nigerian equities market received a boost in the trading week ended September 13, 2024 on the Nigerian Exchange Limited as the benchmark index soared by 1.06 percent while gains through capital appreciation stood at about N608 billion.
Stock market analysts have attributed the renewed sentiment to optimism surrounding anticipated macroeconomic developments.
“Also, increased expectations for favourable fiscal and monetary policies from the anticipated CPI data for this week and the MPC meeting next week, alongside stronger corporate earnings from dividends paying banking stocks, fuelled bullish sentiment, pushing the NGX All-Share Index higher on a week-on-week performance,” stock analysts at Cowry Asset Management Limited explained.
Specifically, the benchmark index of the equities market soared by 1.06 percent week- on- week, crossing the 97,000 mark to close the week at 97,456.62 points due to renewed optimism across all market sectors in the review week.
This optimism was fueled by anticipation of quarter-end window dressing activities, continued expectation of positive corporate results from dividend paying bank stocks and major macroeconomic data.
Market capitalisation of listed equities increased week on week by 1.10 percent to N56 trillion as investors saw N607.8 billion in weekly gains. Consequently, the year-to-date return of the market rose to 30.34 percent.
Trading activity was in the positive territory and was buoyed by increased buying interests on the back of positive market breadth and optimism even as the exchange printed 52 gainers as against 31 decliners.
Thus, the weekly average traded volume advanced by 20.7 percent week on week to 2.58 billion with a total value of N51.21 billion.
However, the weekly deals nosedived by 8.9 percent week- on- week to 50,617 trades in the period.
Furthermore, positive momentum across key sectors such as banking, consumer goods, and oil & gas contributed to the market’s gains, while investors remain watchful of upcoming economic data releases and potential policy shifts.
As such, the NGX-Banking index was the leading gainer this week with 5.12 percent week- on- week uptick.
This was propelled by price rises in FBNH, ETI, ACCESS and FIDELITYBNK respectively. Also, upbeat in momentum from position taking in OANDO and ETERNA led to 2.00 percent weekly gains for the NGX-Oil & Gas index and was followed by NGX-Insurance, NGX-Consumer Goods and NGX-Industrial Goods indexes which reported some pockets of gains this week by 1.59 percent, 1.47 percent and 0.17 percent respectively.
At the close of the week, stocks such as CAVERTON (59.7%), RTBRISCOE (42%), UPDC (37%), FBNH (32%), and ETRANZACT (30%) emerged as the weekly top advancers on the back of positive price movements. On the other hand, the likes of LEARNAFRICA (22%), JULIUS BERGER (18%), PZ CUSSONS (18%), DAARCOMM (12%), and SOVRENINS (11%) all reported adverse price movements as investors rebalance their portfolio ahead of strong expectations for a favourable macros.
According to experts at Cowry Asset, “As Nigeria’s macro landscape continues to evolve, the bourse is poised for further activity in reaction to the changing fundamentals and technical even as we expect continued volatility and entry opportunities for savvy investors.
“Looking into the coming week, we expect positive sentiment to rule the local bourse in the coming week on portfolio rebalancing, and position taking in value – giving and fundamentally sound stocks given the relative strength of the market index trading above the T-line. Nevertheless, we continue to advise investors to focus on fundamentally sound stocks.”
Global equities
Global equities market traded with positive sentiments this week, lifted by optimism surrounding rate cuts by major central banks. In line with this, US equities (DJIA: +1.9%; S&P 500: +3.5%) are poised for a weekly gain as recent consumer price and labour (jobless claims) data strengthened expectations for a 25bps rate cut from the Federal Reserve this week.
Likewise, European equities (STOXX Europe: +1.5%; FTSE 100: +0.9%) rebounded from last week’s losses as investors digested the European Central Bank’s recent rate cut and its implications for future monetary policy. In Asia, Japanese equities (Nikkei 225: +0.5%) advanced, supported by positive momentum on Wall Street and a softer-than-expected producer price inflation reading, which countered the Bank of Japan’s hawkish stance.
Meanwhile, Chinese equities (SSE: -2.2%) declined, driven by (1) concerns over the country’s economic and earnings outlook, and (2) the potential for additional US trade restrictions.
The Emerging Market (MSCI EM: +0.1%) index inched higher supported by gains in India (+2.2%) while the Frontier Market (MSCI FM: -0.8%) index remained in the negative territory due to bearish sentiments in Vietnam (-1.8%).
