Nigerian stocks near 10-week high as investors stake hope on banks

Nigerian stocks came within a spitting distance of their peak valuation in 10 weeks on Monday as a 0.04 per cent rise in the main equity index continued an unsteady recovery that has been in motion after the market fell to one of its lowest levels this year on 8 November.

Expectation regarding what type of stock would make the best investment sense for now mostly favoured bank shares as the sector contributed half of the gainers of the day, drawing strength from an improvement in total transaction volume by 135 per cent.

“At current levels, we consider the market steeply overbought in the short term with Relative Strength Index (RSI) of 79.4 as well as trading close to its upper Bollinger limit,” said analysts at Lagos-based investment bank United Capital in their outlook for the week.

While an RSI reading above 70 sees stocks as trading above their intrinsic value, a reading below 30 means equities are trading below their real value, a situation that makes them especially cheap for investment.

That the market is now just inches away from its upper Bollinger limit is an invitation to sell.

On the downside of trade, market breadth closed in the negative as 12 losers were reported compared to 10 advancers.

The all-share index rose by 10.3 basis points to 48,899.1, while market capitalisation closed higher at N26.6 trillion.

Since January to date, the market has yielded 14.5 per cent.

Learn Africa led gainers, appreciating by 9.7 per cent to close at N1.81. Jaiz Bank grew 9.2 per cent to end trade at N0.95. SCOA went up by 8.9 per cent to N0.86. Sunu Assurance rose to N0.30, notching up 7.14 per cent. Japaul Gold completed the top 5, climbing up 3.70 per cent to N0.28.

Royal Exchange topped the losers’ chart, declining by 9.9 per cent to close at N0.73. Neimeth shed 8.6 per cent to end trade at N1.28. Mansard fell to N1.90, losing 4.52 per cent. Courteville slumped to N0.45, recording 2.17 per cent depreciation. UPDC closed at N0.90, going down by 2.2 per cent.

A total of 236.6 million shares estimated at N2.5 billion were traded in 3,334 deals.

Access Holdings was the most active stock with 121 million of its shares worth N1 billion traded in 172 deals. Jaiz Bank traded 19 million shares, priced at N17.8 million exchanged hands in 52 transactions. GTCO had 17.2 million shares valued at N361.3 million traded in 324 deals. FBN Holdings traded 12 million shares estimated at N131.2 million in 84 transactions. FCMB traded 8.6 million shares valued at N30.1 million in 84 deals.