The Nigerian stock market experienced a positive turn last week, with investors collectively gaining about 295 billion naira (N295bn) by the end of trading. This increase came after two weeks of losses, reflecting a renewed sense of optimism among investors, even though overall trading activity was lower than in previous weeks.
Despite the recent gains, the market’s performance for the year so far has been impressive, with the All-Share Index (ASI) showing a 30.69% increase since the beginning of the year. This positive trend was mainly driven by strong interest in certain stocks, particularly Flourmill, which saw a 10% increase in its price, Oando with a 4.42% rise, and Guaranty Trust Holding Company Plc, which gained 2.75%.
Market analysts noted that the recent positive performance was influenced by a shift in investment strategies and a rebalancing of portfolios. Investors were encouraged by the financial results released for the third quarter of the year and recognized that many stocks were undervalued, meaning they had the potential to increase in price.
The All-Share Index bounced back from losses in the previous week, rising by 0.50% to close at 97,722.28 points. Similarly, the total value of all stocks in the market, known as market capitalization, also increased by 0.50%, reaching 59.22 trillion naira (N59.22tn).
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However, when looking at the overall market, there were more stocks that lost value than those that gained. Specifically, 45 stocks saw their prices drop, while only 39 stocks increased in value. This indicates a general sense of caution among investors, likely due to ongoing economic uncertainties.
During the past week, a total of 1.482 billion shares were traded, worth approximately 38.88 billion naira. This was a decline compared to the previous week, when 6.468 billion shares valued at 75.75 billion naira changed hands. The Financial Services sector was the most active, accounting for 1.068 billion shares worth 19.82 billion naira, which represented 72.04% of the total trading volume.
Following the Financial Services sector, the Oil and Gas sector traded 103.143 million shares worth 11.35 billion naira, while the Consumer Goods sector saw 77.198 million shares traded, valued at 2.845 billion naira.
The most actively traded stocks for the week were Access Holdings Plc, United Capital Plc, and United Bank for Africa Plc, which together accounted for 433.794 million shares worth 10.27 billion naira, making up about 29.27% of the total trading volume.
In terms of sector performance, three out of five sectors saw positive movement, indicating strong investor interest. The NGX-Insurance, NGX-Banking, and NGX-Consumer Goods indices all posted gains, thanks to increased buying of stocks like Flour Mills and United Bank for Africa.
On the other hand, the NGX-Oil & Gas and NGX-Industrial sectors experienced slight losses due to unfavorable price changes in stocks like Oando and BUA Cement.
At the end of the week, some of the best-performing stocks included John Holt, Eunisell, Tantalizer, SUNU Assurance, and Flourmill, with gains ranging from 23% to 61%. Conversely, Daar Communication, Oando, VFD Group, AbbeyBDS, and Ellah Lakes were among the worst performers, with losses between 7% and 12%.
Looking ahead, analysts from Cowry Asset Management Limited expect a struggle between buyers (bulls) and sellers (bears) in the market, with buyers likely to come out ahead. They see opportunities for savvy investors to find undervalued stocks, especially given the current market volatility. The upcoming release of the October Consumer Price Index data by the National Bureau of Statistics could also impact investor sentiment, as inflation and fluctuations in the naira’s value continue to create caution among market participants.
Additionally, the Chapel Hill Denham Nigeria Infrastructure Debt Fund has added 218,084 units to its listing on the Nigerian Exchange, increasing the total units from 961,123,921 to 961,342,005 units. This increase was a result of the Fund’s third-quarter scrip dividend for 2024.
