The Nigerian stock market value appreciated by N195.93 billion in the just concluded week as a bullish trend prevailed amid a mixed sentiment expressed by investors due to changes in key macroeconomic indicators.
The policy shift involved the rebased Consumer Price Index data that significantly dropped headline inflation figures from 34.80 per cent to 24.48 per cent.
It also includes the retaining of benchmark interest rate and all other parameters for the first time in more than two years by the Central Bank of Nigeria.
Analysts had also anticipated that investors would closely monitor further corporate earnings releases and dividend declarations.
During the week’s trading sessions, these key events provided direction for investors as they assessed the potential impact on their portfolios and expressed mixed sentiments on the floor of the Nigeria Exchange Limited.
At the end of the week’s trading, the market capitalisation rose by 0.29 per cent to N67.61 trillion on Friday, February 21, from the N67.42 trillion it opened with on Monday, February 17.
The appreciation of the market capitalisation left investors with an N195.93 billion gain despite the cancellation of 166.95 million units of ordinary shares of Dangote Cement during the week.
According to the NGX, with the cancellation, the total issued and fully paid-up shares of Dangote Cement have now decreased from 17,040,507,405 to 16,873,559,252 ordinary shares.
However, the All-Share Index similarly rose by 0.41 per cent to close at 108,497.40 basis points from 108,053.95 basis points.
While the ASI and market capitalisation appreciated, all other market statistics, including deals, volume, and value of traded stocks, closed in the red.
A total turnover of 2.001 billion shares worth N49.486 billion in 70,853 deals was traded during the week by investors on the floor of the exchange, in contrast to a total of 2.414 billion shares valued at N55.512 billion that exchanged hands in 80,988 deals.
Further analysis of the week’s trading activity showed that on the sectoral front, mixed reactions were witnessed as three indices rose relative to three others that declined.
The consumer goods index saw the highest increase by 6.55 per cent to 1,846.47 basis points from 1,732.99 basis points. This was followed by the insurance index’s 0.62 per cent rise to 744.27 basis points from 739.67 basis points. And the industrial index rose by 0.05 per cent to 3,638.55 basis points from 3,636.85 basis points.
In contrast, the banking index saw the highest decline by -3.42 per cent to 1,200.20 basis points from 1,242.75 basis points. The oil and gas followed with a -2.87 per cent decline to 2,546.46 basis points from 2,621.62 basis points, while the commodity index fell by -0.47 per cent to 1,008.43 basis points from 1,013.18 basis points.
But among the top-performing stocks of the week was BUA Food, whose share price appreciated by N44.50 to close at N418.00, and Dangote Sugar Refinery, whose share price rose by N5.40 to close at N41.40.
Other top gainers were Abbey Mortgage Bank whose share price rose by 50 kobo to close at N3.60, Smart Products Nigeria (by 0.04 kobo to 0.30 kobo), and Sovereign Trust Insurance (by 0.14 kobo to N1.32)
“The equities market demonstrated resilience over the week, recording a 0.41 per cent gain despite investors’ concerns regarding the latest inflation report.
“The positive sentiment reflects investors’ optimism as they assess the potential impact of the inflationary pressure on monetary policy and corporate earnings,” GTI research analysts said.
Measured by volume, the financial services industry led the activity chart with 1.199 billion shares valued at N26.325 billion traded in 30,527 deals and contributed 59.91 per cent and 53.20 per cent to the total equity turnover volume and value, respectively.
The agriculture industry followed with 234.002 million shares worth N1.683 billion in 3,191 deals, while the consumer goods industry recorded a turnover of 173.829 million shares worth N7.150 billion in 8,903 deals.
According to analysts at Cowry Asset Management, the sustained bullish trend was “driven by investors taking positions for portfolio rebalancing, prompted by pressured sell-offs across various counters and shaped by expectations and outcomes of the newly rebased CPI report and MPC decisions, where the policy committee unanimously decided to pause rate hikes.”
Anticipating how trading activity would fare in the coming week, the analysts at GTI Research said, “Investors will be eager to see if this momentum carries over into the coming week.”
On their part, Cowry Asset Management analysts added, “We anticipate mixed market sentiment in the coming week as investors await further corporate earnings releases and dividend declarations. Additionally, market participants will closely analyse the recently published macroeconomic data on the rebased CPI and the rate hike pause by the CBN to assess their impact on investment portfolios.
“However, we expect a flow of funds into the equities space as investors seek better investment opportunities, particularly in the near term. Investors are advised to remain vigilant, focusing on stocks with strong fundamentals to make informed investment decisions.”
