The Nigerian stock market extended its bullish run during the week ended on October 25, 2024, with investors pocketing a total gain of N835 billion on the back of favourable sentiment and strong liquidity inflows.
Market experts say the positive performance was underpinned by increased investor confidence and active buying interest, highlighting an optimistic outlook on the country’s economic fundamentals and key market indicators.
Over the trading week under review, market participants engaged in strategic investments, boosting the Nigerian Exchange All-Share Index by 1.41 percent to reach 99,448.91 points.
The surge is said to have been primarily driven by heightened buying interest in financial and oil and gas stocks, as liquidity continued to flow steadily into the market.
This capital injection not only lifted the market capitalization above N60 trillion to close at N60.26 trillion but also pushed the index’s year-to-date return to a robust 33.0 percent.
Reflecting the heightened market confidence, trading activity showed a marked increase, with momentum surging to high levels across stocks of varying sizes.
A total of 57 stocks advanced compared to 19 lagging behind, a trend bolstered by rebalancing and position-taking activities across small, mid, and large-cap stocks.
Consequently, the weekly trade value spiked by 16.3 percent to N85.95 billion, while traded volumes reversed last week’s decline, jumping by 48.03 percent to 2.14 billion shares executed across 41,217 deals, representing a 4.23 percent rise from the previous week.
Sectoral performance this week was overwhelmingly positive, with gains seen across all major indices except the NGX Consumer Goods Index, which declined by 0.84 percent. This drop was attributed to price pressures on DANGSUGAR, FTN COCOA, NNFM, and INTERNATIONAL BREWERIES. In contrast, the NGX Banking Index emerged as the week’s top performer, posting a 7.86 percent week-on-week increase, buoyed by strong investor sentiment in banking heavyweights such as UBA, FBNH, ACCESSCORP, and STANBIC.
The positive sentiment follows the release of robust nine-month earnings from banks, providing investors with encouraging insights for year-end expectations.
Furthermore, gains were recorded in the NGX Insurance Index, which rose by 4.04 percent due to positive movements in WAPIC INSURANCE, LASACO, and GUINEA INSURANCE. The NGX Oil & Gas Index also recorded a solid 3.95 percent gain, led by SEPLAT after the Ministry of Petroleum granted the company clearance to acquire Mobil Producing Nigeria Unlimited (MPNU). The NGX Industrial Index posted a mild gain of 0.1%, thanks to upward price trends in UPDC and LAFARGE.
The top weekly advancers included EUNISELL up by 21 percent, UBA, 19 percent, UNILEVER, 18 percent, ABBEYBDS, 17 percent, and CORONATION, 16 percent, showcasing significant appeal among equity investors. Conversely, the share price of stocks such as DANGSUGAR which declined by 10 percent, SCOA, 10 percent, JOHNHOLT, 10 percent, NSLTECH, 10 percent, and REGALINS, 8 percent were the top losers for the week.
Market analysts are of the view that the recent positive quarterly corporate earnings reports have further buoyed market sentiment, particularly in the banking, industrial goods, and consumer goods sectors, delivering strong performances from key players and driving the benchmark index closer to the 100,000-points psychological threshold.
Experts insist that the current rally is likely to persist, though cautious profit-taking activities may create intermittent dips.
Looking ahead, they see the local bourse poised for further gains as investors look forward to the upcoming macroeconomic data releases and corporate earnings reports, which are anticipated to influence short-term trading dynamics.
The latest data released by the Nigerian Exchange on the market’s Domestic and Foreign Portfolio Report, shows that total transactions in the local bourse rose to a six-month high, in September, increasing by 29.9 percent m-o-m to N493.01 billion, from N379.52 billion posted in August.
The performance was primarily driven by the higher participation from domestic investors who contributed 91.6 percent of gross transactions despite the weaker participation from foreign investors with 8.4 percent of gross transactions.
Analyzing the breakdown, domestic investors’ inflows surged by 40.2 percent m/m to N451.60 billion compared with N322.05 billion in August due to increases in collections from retail and institutional investors which rose by 59.4 percent m/m and 15.7 percent m-o-m, respectively.
However, inflows from foreign investors dropped for the fourth consecutive month, declining by 27.9 percent m-o-m to N41.41 billion in September, down from N57.47 billion in August, partly due to the exchange rate risk associated with the increased volatility of the naira.
Market analysts are, however, optimistic that domestic investors will continue to contribute the most to total transaction value, insisting that buying activities will be constrained by elevated yields in the fixed-income market.
At the same time, there is expectation that the sustained volatility of the naira to constrain foreign investors’ participation in the equities market may continue.
