Nigerian Bourse Booms as Market Movers Rally
Market capitalisation rises by N1.7 trillion as market movers companies’ stock listed in the Nigerian Exchange (NGX) recorded large price appreciation amidst an upward adjustment to the benchmark lending rate.
Ordinarily, investments often split betting between stocks and the fixed income market where an interest rate hike is expected to drive yield repricing. The monetary policy committee of the Central Bank of Nigeria this week raised the policy rate by 100 basis points.
Market analysts projected that the surge will trigger yield repricing. However, there has been buying interest in the stock market as value hunters positioned strongly in stock market heavyweights- Airtel Africa, Dangote Cement, MTN Nigeria, BUA Cement and BUA Foods.
This week, Airtel Africa’s share price popped higher by 14.2% after previous selloffs by equities investors that spotted value in London Stock Exchange. Dangote Cement also gained 10% while MTN Nigeria’s share price rose by 6.6%.
BUA Group helped the stock market momentum this week with gains across its two key subsidiaries – BUA Cement and BUA Foods.
Trading data show that BUA Cement’s share price rose by 9.7% while BUA Foods popped up 11.2% for investors who had taken a position in the company which came to the market this year.
Consequently, the Nigerian Exchange Al-share index advanced 6.9% in a week to settle at 47,554.34 points. Market return advanced to 11.3% from the beginning of the year to date, up from 4.2% while market capitalisation increased by ₦1.7 trillion to ₦25.9 trillion, Afrinvest said in a market report.
In the week, activity level improved as average volume and value traded rose 2.1% and 77.0% to 141.8 million units and ₦3.1 billion respectively. The top traded stocks by volume were TRANSCORP (93.8m units), AIICO (49.1m units) and ZENITH (41.4m units) while MTNN (₦2.6bn); ZENITH (₦913.0m) and AIRTELAF (₦894.4m) were the top traded stocks by value.
Afrinvest said performance across sectors was bullish as 5 of 6 indices under its coverage universe closed in the green. The AFR-ICT index led advancers, up 10.7% week on week following gains in AIRTELAF (+14.2%) and MTNN (+6.6%).
Trailing, the Industrial Goods and Insurance indices rose 9.5% and 5.1% week on week respectively due to buying interest in DANGCEM (+10.0%), BUACEMENT (+9.7%), NEM (+9.9%), and CORNERST (+15.9%). READ: Market Movers Valuations Unaltered as Stocks Bleed
Price appreciation in ACCESSCORP (+6.2%), ZENITH (+2.6%), BUAFOODS (+11.2%), and NB (+18.7%) pushed the Banking and Consumer Goods indices higher by 3.1% and 0.2% week on week respectively.
Conversely, the Oil & Gas index was the sole loser, down 1.3% on account of sell pressure in SEPLAT (-3.6%) and TOTAL (-2.0%). Investor sentiment, as measured by market breadth, improved to 0.34x from -0.02x as 49 stocks advanced, 19 declined and 89 closed flat, Afrinvest said.
The top outperforming stocks for the week were NB (+18.7%), SOVRENINS (+16.7%), and PRESTIGE (+16.2%) while the top underperforming stocks were NESTLE (-20.7%), CAPHOTEL (-10.0%), and SCOA (-9.3%).
“We anticipate the bullish streak would continue following renewed interest in the market. However, this sentiment might be short-lived as economic catalysts remain absent”, Afrinvest said. # Nigerian Bourse Booms as Market Movers Rally