Equities Investors Gain N894bn on Santa Claus Rally
Equities investors in the Nigerian Exchange (NGX) gained more than N894 billion amidst bargain hunting ahead of the Christmas celebration for 2023. Stockbrokers’ note indicated that the local bourse extended its bullish trend, advancing by 2.26% week on week to close at 74,023.27 index points.
The key driver of the large weekly gain was equities investors’ interest in financial services stocks, lifting market year-to-date return farther ahead of an annual inflation rate of 28.2%.
The robust interest, particularly in high-priced equities, played a pivotal role in propelling the NGX All-Share index, characterized by substantial traded volumes and a positive market breadth, Cowry Research said in a note.
Market analysts said this positive momentum coincided with shifts in market fundamentals and liquidity levels, indicating a dynamic landscape. The equity market not only achieved remarkable highs but also surpassed historical thresholds throughout the week.
The bullish trajectory persisted amid nuanced market sentiments, with select stocks hitting new 52-week highs in the lead-up to the Christmas week.
As a result of the positive movement in prices of stocks, market capitalization jumped by 2.26% week-on-week to N40.51 trillion. The stock market increased by a total of N894.17 billion over four out of the five trading sessions.
The bullish trend was reflected across sectors, with notable advancements in the financial services sector. Banking and Insurance stocks led gainers by 3.35% and 1.70%, respectively.
This surge was attributed to price appreciations in banking institutions such as FIDELITY, STERLINGNG, UBA, ACCESS, and FBNH, along with insurance firms like NEM, MANSARD, and CONHALLPLC.
Additionally, the Industrial and Oil and Gas indexes recorded appreciations of 0.33% and 0.09%, driven by a surge in buying interest in select counters like MULTIVERSE, IMG, WAPCO, ETERNA, and OANDO.
However, the Consumer Goods index faced a minor setback of 0.70%, driven by notable price declines in ELLAHLAKES, GUINNESS, MCNICHOLS, NB, and NESTLE.
Despite a 31.49% decrease in total traded volume, reflecting a week of high activity and positive market breadth, the number of trades rose by 8.56% to 35,848 deals. Notably, the weekly traded value grew by 70.05% week-on-week, closing at N53.79 billion.
At the week’s close, top gaining stocks included INFINITY, DAARCOMM, MULTIVERSE, TRANSCOHOT, and TRANSCORP, securing gains of 61%, 50%, 41%, 36%, and 26%, respectively.
Conversely, ETRANZACT, THOMASWY, PRESTIGE, and GUINNESS faced declines in their share prices on a week-on-week basis, shedding 12%, 10%, 10%, and 9%, respectively.
Cowry Research anticipates the positive market trend to continue, investors are expected to engage in profit-taking and bargain hunting for dividend-paying stocks, driven by sector rotation and portfolio rebalancing.
The market sentiment is expected to be buoyed by high expectations for robust full-year corporate financial results and the attractiveness of high yields, especially in a low-interest-rate environment.
The strategic reallocation of funds among sectors and adjustments in portfolios to align with changing market conditions are likely to shape trading activities, reflecting investors’ pursuit of optimal risk-return profiles and capitalizing on emerging opportunities, stockbrokers at Cowry Asset said. Naira Devaluation Deepens Economic Crisis in Nigeria
