Overweight Stocks Drive N1.7trn Equities Portfolio Growth
Buying interest companies’ stocks with positive outlook or overweight drove N1.71 trillion equities portfolio growth in the Nigerian Exchange (NGX), reducing the impacts of sell-side actors’ activities.
The Nigerian Exchange key performance indicators were upswing as value hunters positioned themselves in underpriced stocks seen across sectoral indexes.
Investor sentiment remained upbeat, as the benchmark All-Share Index (ASI) appreciated by 2.49% week-on-week, closing at 111,742.01 points.
The market index broke through the psychological barrier of 112,000 points at midweek, reaching an all-time high of 112,237.26 points before slight profit-taking pulled it back slightly.
The performance was underpinned by strong macroeconomic fundamentals, renewed buying interests, and positive market internals, according to Cowry Asset Research analysts. Stockbrokers said these factors drove significant upward momentum, pushing several equities to new 52-week highs.
Notably, the bullish wave was most prominent in the consumer goods and insurance sectors, which enjoyed robust demand from both retail and institutional investors. Market capitalisation rose by 2.49% to N70.46 trillion, according to data from the Nigerian bourse.
In the just concluded week, equities investors gained N1.71 trillion while the market breadth stayed positive, with 56 gainers outperforming 44 decliners, reflecting sustained confidence in select growth and value stocks.
However, market activity in terms of trade volume and number of deals was somewhat mixed. The total number of deals recorded during the week declined by 14.9% to 89,380 transactions, while the total trade volume fell by 3.51% to 3.78 billion units.
In contrast, total trade value surged significantly by 59.8% to N119.19 billion. Market analysts at Cowry Asset Limited said this suggests that although fewer transactions took place, investors showed increased appetite for high-value equities, perhaps signaling accumulation of blue-chip and large-cap stocks.
Across sectoral indices, the market posted broadly positive performance with the exception of the Oil and Gas Index, which declined by 2.05%. This drop was largely due to profit-taking in heavyweights such as SEPLAT, MRS Oil, and CONOIL.
On the other hand, the Consumer Goods Index led sectoral gainers with a 3.78% increase week-on-week, buoyed by renewed demand for food and beverage stocks.
The Insurance Index rose by 1.02%, while the Banking Index gained 0.66%, supported by price appreciations in tier-one banks. The Industrial Index edged higher by 0.35%, and the NGX Commodity Index posted a modest 0.14% gain.
Several individual stocks contributed meaningfully to the rally, with notable gains in NAHCO, ARADEL, Airtel Africa, Okomu Oil, Guinea Insurance, Honeywell Flour Mills, Livestock Feeds, Ecobank Transnational Inc (ETI), AXA Mansard, Zenith Bank, Fidelity Bank, Custodian Investment, SCOA, and RT Briscoe.
These counters attracted increased investor attention due to improved earnings outlook, corporate action expectations, or positive sector developments.
In terms of best-performing stocks for the week, Universal Insurance Plc (UPL) led the pack with a 35.3% gain, followed by Red Star Express Plc (REDSTAREX) with a 24% return.
Other strong performers included Omatek Ventures Plc (OMATEK), ABC Transport Plc (ABCTRANS), and Northern Nigeria Flour Mills Plc (NNFM), which posted weekly gains of 20%, 18.5%, and 17%, respectively.
Conversely, the worst-performing stocks included Abbey Mortgage Bank (ABBEYBDS), which shed 26.9% of its value; Legend Internet (LEGEND) down 18.9%; Enamelware (ENAMELWA) with an 18.8% loss; and both International Medical Group (IMG) and Multiverse Mining and Exploration (MULTIVERSE), each declining by 15.6%.
“We anticipate that the current bullish trend will likely extend into the coming week. This optimism is driven by sustained investor interest in defensive and fundamentally sound stocks, as well as ongoing positioning ahead of the half-year earnings season”, Cowry Asset Limited said in its market update.
The investment firm said the proximity to the close of the second quarter is expected to further motivate strategic accumulation, particularly by institutional investors seeking exposure to dividend-paying and growth-oriented equities.
“With momentum on its side, the NGX appears poised for continued growth in the near term—provided that macro and policy fundamentals remain supportive”.
However, as valuations rise, Cowry Asset Management Limited advised investors to maintain a cautious stance and continue to prioritise stocks with solid fundamentals, healthy balance sheets, and resilient earnings potential. #Overweight Stocks Drive N1.7trn Equities Portfolio Growth# Development Bank of Nigeria Disburses N1trn to MSMEs
