Market return spikes to 6% as Nigerian exchange extends rally

According to trading data from last week, the stock market’s year-to-date return spiked to 6% as the Nigerian Exchange (NGX) extends its rally. The Nigerian bourse has been in gaining streaks amidst earnings releases and dividend announcements.

A rather impressive outing by some bellwether continues to drive investors’ buying interest in some growth stocks, pushing stock market key performance indicators upward despite uncertainties in the local economy ahead of 2023 election.

Data from the Exchange shows that the All-Share index gained 0.2% to 54,327.30 points week on week; driven by gains in MTNN (+1.7%), DANGCEM (+1.2%), and WAPCO (+1.4%).

Consequently, market capitalisation increased by ₦62.2 billion to ₦29.6 trillion while year-to-date return improved to 6.0%, stockbrokers said in a market brief shared with clients.

Though the stock market size reflated, the activity level dampened. Transactions in the Nigerian Exchange declined as average volume and value traded fell 75.1% and 17.4% sequentially to 188.9 million units and ₦4.5 billion, Afrinvest told investors in an email.

The most traded stocks by volume were GTCO (103.6m units), UNIVINSURE (92.4m units), and TRANSCORP (51.8m units) while GEREGU (₦4.5bn), GTCO (₦2.6bn), and AIRTELAF (₦2.5bn) led by value.

In its market brief, Afrinvest told investors that performance across sectors under its coverage varied as 3 of the 6 indices advanced while the remaining 3 closed in the negative. According to the investment firm, the AFR-ICT index led the advancers, up 0.7% weekly, following price appreciation in MTNN (+1.7%).

Trailing, the Industrial Goods and Oil & Gas indices rose 0.6% w/w apiece buoyed by gains in DANGCEM (+1.2%), WAPCO (+1.4%), CONOIL (+20.9%), and OANDO (+1.6%). Conversely, sell pressure on AIICO (-4.8%), MBENEFIT (-11.1%), and CORNERST (-6.3%) drove the Insurance index lower by 3.3%.

Also, the Banking and Consumer Goods indices fell 0.9% and 0.6% week on week respectively due to selloffs on FIDELITY (-7.0%), STERLING (-7.4%), NB (-3.1%) and CHAMPION (-8.2%).

Investor sentiment as measured by market breadth waned to -0.3x from 0.4x in the prior week, as 22 stocks gained, 44 lost while 86 closed flat. TRIPPLEG (+30.5%), INTENEGI (+25.3%), and CONOIL (+20.9%) led the top gainers.

On the other hand, FTNCOCOA lost 15.2% of its market value last week. PRESTIGE was priced down by 13.0% and JAPAULGO declined by 11.8%. In the coming week, analysts said they expect a mildly bearish market performance on account of dampened investor sentiment.