NGX Gains Traction as Investors Lock Funds in Stocks
The equities segment of the Nigerian Exchange, NGX, popped more than N396 billion as stockbrokers at Broadstreet executed large buy orders from value hunting clients. Ahead of the 2023 election, some investors have begun to lock their funds in the stock market after price corrections.
Last week, the local bourse experience strong demand for some value, growth stocks which pushed year-to-date returns upward as key performance indicators improved. Cconsequent to the upbeat which spanned four out of five trading sessions, the Nigerian Exchange All-share index (NGX-ASI) increased by 1.51% to 48,881.93 points.
Stock analysts indicate that trading activities in the week varied as the total traded volume increased by 45.8% week on week to 1.23 billion units. Also, the total traded value for the week surged 106.76% week on week to N15.24 billion.
However, the total deals traded for the week tanked by 5.36% week on week to 15,316 trades, according to data from the local bourse.
There was a noticeable increase in demand for BUA cement, supported by a strong interest in Ecobank Bank Transnational Incorporation, while Nestle Nigeria saw a very moderate recovery from the downturn. READ: Fixed Income Market Re-price Yields as Naira Depreciates
Market analysts at Cowry Asset Management attribute the move to portfolio reshuffling by investors seeking alpha ahead of the year-end seasonalities and the price correction mode of the market as players continue to digest the mixed macroeconomic data ahead of the earning season.
Top performers include BUACEMENT which gained 19.1% followed by ETI with 11.4% share price appreciation while GUINNESS rose by 10%, ETERNA appreciated by +9% and PRESCO popped up by 7%.
In the week, investors’ value appreciated ₦396.1 billion as market capitalisation rose to ₦26.6 trillion while year-to-date return inched higher to close at 14.4%. Activity level was mixed as the average volume traded fell 8.9% to 153.0m units while the value traded rose 9.8% to ₦2.7 billion.
The most traded stocks by volume were FBNH, traded 235 million units, TRANSCORP traded 63.0m units and GEREGU did 34.1 million units while GEREGU (₦3.6bn), FBNH (₦2.6bn) and MTNN (₦1.6bn) led by value.
In its market note, Afrinvest Limited said performance across sectors under its coverage universe was positively skewed as 4 of the 6 indices advanced week on week. The Industrial and Consumer Goods indices led the pack, up 8.5% and 1.6% week on week respectively following price uptick in BUACEMENT (+25.1%) and GUINNESS (+10.0%).
Trailing, the Insurance and Oil & Gas indices rose 1.3% and 0.3% w/w sequentially due to gains in ROYALEX (+12.5%) and ETERNA (+8.8%). Conversely, sell-offs in MTNN (-2.3%) and ZENITH (-2.9%) dragged performance in the AFR-ICT (-1.0%) and Banking (-0.2%) indices.
Investor sentiment as measured by market breadth remained unchanged at 0.1x as 32 stocks gained, 24 lost while 96 closed flat, according to Afrinvest Limited. BUACEMENT (+25.1%), ROYALEX (+12.5%) and ETI (+11.4%) led the top gainers while SCOA (-25.5%), UNITYBNK (-14.0%) and CAPHOTEL (-9.8%) led the decliners.
“In the coming week, we anticipate a mixed performance as investors take profit while seeking bargain hunting opportunities”, Afrinvest said. Stockbrokers at Cowry Asset expect the current trend of bullish momentum to persist as investors continue on profit booking and portfolio reshuffling ahead of the year-end seasonality amid election uncertainty. #NGX Gains Traction as Investors Lock Funds in Stocks
