Market Cap Appreciates by N481bn on Investors’ Interest in Banking Stocks
CHIGOZIE AMADI
The market capitalisation of the Nigerian Exchange Limited (NGX), at the end of trade last week, gained N481 billion to close at N55.978 trillion, boosted by investors’ renewed interest in banking stocks.
The NGX Banking index led the gainers’ chart last week, appreciating by 5.14 per cent week-on-week, buoyed by positive news of the Central Bank of Nigeria’s approval for the merger between Unity Bank and Providus Bank, as well as the reintroduction of the retail Dutch auction system (rDAS) in the foreign exchange market to authorised dealer banks.
Consequently, the NGX All-share index appreciated by 0.87 per cent week-on-week (W-o-W) to close at 98,592.12 basis points.
Also, the NGX ASI year-to-date return of the index as at August 9, 2024 stood at 31.9 per cent.
Sectoral analysis of last week’s performance revealed a generally positive trend, with most sectors seeing gains, except for the NGX Industrial index, which retreated by 3.67 per cent.
This was followed by gains in the NGX Consumer Goods, NGX Insurance, and NGX Oil & Gas indices, which rose by 2.35 per cent, 1.79 per cent, and 0.97 per cent respectively.
The market breadth for the week was positive as 46 equities appreciated in price, 38 equities depreciated in price, while 67 equities remained unchanged.
Oando led the gainers table by 60.47 per cent to close at N40.60, per share. R T Briscoe followed with a gain of 51.19 per cent to close at N1.27, while Japaul Gold & Ventures went up by 35.80 per cent to close to N2.39, per share.
On the other side, Champion Breweries led the decliners table by 15.03 per cent to close at N2.77, per share. BUA Cement followed with a loss of 9.99 per cent to close at N128.90, while University Press declined by 9.92 per cent to close at N2.18, per share.
Overall, a total turnover of 2.679 billion shares worth N49.017 billion in 47,451 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 3.393 billion shares valued at N52.304 billion that exchanged hands last week in 44,814 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.982 billion shares valued at N31.985 billion traded in 23,467 deals; contributing 74.00 per cent and 65.25 per cent to the total equity turnover volume and value respectively. The Oil and Gas Industry followed with 229.680 million shares worth N7.441 billion in 4,021 deals, while the ICT Industry traded a turnover of 113.887 million shares worth N3.059 billion in 4,260 deals.
Trading in the top three equities; Access Holdings, Veritas Kapital Assurance and United Bank for Africa (UBA) accounted for 756.035 million shares worth N10.726 billion in 6,985 deals, contributing 28.22 per cent and 21.88 per cent to the total equity turnover volume and value respectively.
Capital analysts said, the recent uptrend on the equities market is expected to continue this week amid increased buying interest from investors.
Last week, strong optimism returned to the local bourse, driven by a rebound in global equities amidst fears of a recession. Increased buying interest across major market sectors bolstered performance, as market participants digested recent corporate earnings and developments in the fixed income market.
The composite NGX All-Share Index closed higher, once again breaking through the 98,000-point psychological barrier, thereby extending the markup phase. This occurred amid above-average trading volumes and positive market internals, reflecting strategic position-taking in high-value stocks and blue-chip companies, underpinned by their robust quarterly earnings and future earnings potential, which support price growth and dividend payouts.
Looking ahead to the new week, analysts at Cowry Assets Management Limited said “we expect the current upward trend in the bourse to persist, supported by improving market fundamentals and continued buying sentiment.
“The ongoing dividend earning season is likely to sustain positive sentiment among market players. As we await the half-year earnings reports from major banks in the coming weeks, investors are expected to continue repositioning for value, taking advantage of any market pullbacks. Nevertheless, we continue to advise investors to focus on fundamentally sound stocks,” he stressed.
The chief operating officer of InvestData Consulting Limited, Mr. Ambrose Omordion said, “we expect continue trend and mixed sentiment on increased volatility, profit taking and sector rotation amidst oversold region. Portfolios repositioning is however continuing, as investors take advantage of pullbacks to buy into value.”
He added that, this is amid the volatility and pullbacks that add more strength to upside potential, urging that ‘consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.’
