NSE Rises N109.2Bn on Big Swings in Banking Stock

NSE Rises N109.2Bn on Big Swings in Banking Stock

The Nigerian Stock Exchange (NSE) market capitalisation rises N109.2bn on Thursday on big, wild prices swings in Banking and industrial sectors shares.

Buying interest in some banking stocks in addition to bargain hunting in industrial segment lifted local bourse amidst uncertainties in the financial system.

Recent trading session at the market has been characterize with up and downward swings due to yields adjustment in the fixed income space.

Today, gains in GUARANTY (+6.4%), ZENITH (+7.3%) and WAPCO (+2.7%) buoyed performance in the market as investors gain N109.2 billion.

The benchmark index increased 54 basis points (bps) to 38,914.84 points, moderating year to date loss to -3.4%.

Consequently, stock market capitalisation increased ₦109.2 billion to ₦20.4 trillion as sentiment improved.

Trading activity advanced as volume and value surged 727.8% and 118.7% respectively to 1.5 billion units and ₦5.9 billion.

The most traded stocks by volume were UNITYBNK (1.0bn units), MULTIVERSE (200.2m units) and GUARANTY (122.2m units).

Meanwhile GUARANTY (₦3.6 billion), ZENITH (₦711.9 million) and UNITYBNK (₦700.7 million) led by value.

Mixed Sector Performance

“Across our sector coverage, performance was mixed as 3 indicators lost, 2 gained and the AFR-ICT index remained flat”, Afrinvest said in a report.

The Insurance index led the losers, down 0.8% following price declines in WAPIC (-9.1%) and LINKASSURE (-9.1%).

Also, the Consumer Goods and Oil & Gas indices dipped 0.2% and 0.1% respectively on the back of losses in OANDO (-3.0%), DANGSUGAR (-2.9%) and HONYFLOU (-5.6%).

Conversely, strong demand for GUARANTY (+6.4%), ZENITH (+7.3%) and WAPCO (+2.7%) pushed the Banking and Industrial Goods indices higher by 4.4% and 0.2% respectively.

Investor Sentiment Strengthens

Investor sentiment, as measured by market breadth strengthened to 1.8x from the 1.1x recorded previously as 22 stocks gained against 13 decliners.

ETERNA (+10.0%), LASACO (+8.3%) and ZENITH (+7.3%) were the top gainers while WAPIC (-9.1%), LINKASSURE (-9.1%) and ABCTRANS (-6.7%) were the top decliners.

Afrinvest expects a gain reversal in the last trading session of the week due to profit taking.

Market Development:

Today, Guaranty Trust Bank Plc. published 2020 audited financials, reporting a profit after tax growth of 2.3% year on year, following a 9.6% expansion in net interest income.

Analysts at Chapel Hill Denham said what is more instructive for them is that the Bank declared a final dividend of N2.70k/share, translating to a total dividend of N3.00k.

Unlike UBA, this represents a dividend per share growth of 7.1% year on year.

“At today’s closing price, the declared dividend translates to a 10.1% yield, a juicy dividend yield in our view”, analysts said.

In reaction, GUARANTY stock rallied today, rising by as much as 6.43%. That, together with investors’ interest in ZENITHBANK (+7.32%) combined to drag the benchmark index back to the positive terrain.

For context, the NSE All-Share Index notched higher by 54bps, effectively erasing the previous losses in the week.

The week-to-date gain is now positive at 69bps, thereby leaving the NSE ASI on the verge of closing positive for the first time in seven weeks.

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NSE Rises N109.2Bn on Big Swings in Banking Stock