Onome Amuge
The Nigerian equities market showcased remarkable resilience, commencing the trading week on a decidedly bullish note, propelling the All-Share Index (ASI) to a new historic high of 109,968.48 points. This fresh rally, buoyed by robust investor confidence, injected N593 billion into market capitalisation, pushing its valuation to an unprecedented N69.34 trillion.
The market’s strong performance, analysts observed, underscores a prevailing appetite for fundamentally strong assets, as selective buying interest in blue-chip and mid-cap stocks drove gains. While overall trading activity was mixed, with a drop in volume and value, there was a notable increase in the number of deals which rose by 22.55 per cent for the day. Monday’s performance proved to be a reflection of a strategic and deliberate approach by investors, who had during the previous week lost N201 billion as reported by Business a.m.
The upswing was largely attributed to the sustained buying interest in companies perceived as having strong fundamentals. While the provided data points to Aradel as a top gainer, with a 9.98 per cent appreciation, stockbrokers observed a significant buying interest in stocks, such as UPL, ABC Transport, Linkage Assurance, C&I Leasing among others. The selective accumulation of quality assets served as the primary catalyst for the N583 billion gain in investor wealth.
In terms of sectoral performance, the Banking sector, a traditional barometer of market sentiment, registered a gain of 0.29 per cent, the Industrial Goods sector advanced 2.16 per cent, while the Commodity sector also recorded gains of 0.66 per cent, indicative of renewed interest in raw material plays.
Conversely, the Insurance sector experienced a decline of 1.06 per cent. The Consumer Goods sector, recorded a loss of 0.75 per cent, while the Oil & Gas sector also edged down by 0.09 per cent, despite the strong showing of individual oil and gas companies like Aradel.
Beyond Aradel’s 9.98 per cent, standout performance, other top gainers included UPL (+9.86%), ABC Transport (+8.43%), Linkage Assurance (+8.16%), and C&I Leasing (+7.32%), all contributing to the positive market breadth, which saw 33 stocks advancing against 31 declining.
On the flip side, a handful of stocks faced headwinds. Triple G led the losers’ chart with a sharp decline of 10.00 per cent, followed closely by MRS (-9.97%), Chellarams (-9.96%), UACN Property REIT (-9.95%), and IMG (-9.91%). The depreciation of these stocks, alongside others such as Custodian (-9.63%), VFDGroup (-9.32%), Dangsugar (-2.56%), and GTCO (-2.29%), indicated the market’s discerning nature, where even amidst a broader rally, certain companies face selling pressure.
While the market’s headline indices rose, the underlying trading activity presented a divergence. The total volume of trades dropped 36.47 per cent, and the value of trades also declined by 39.92 per cent. According to market analysts, this suggests that while fewer shares were exchanged, the transactions that did occur were concentrated in higher-value, sought-after equities.
In terms of activity, FIDELITYBK emerged as the volume leader, accounting for 11.36 per cent of total transactions, followed by CUSTODIAN (9.02%), ACCESSCORP (8.73%), GTCO (6.06%), and ZENITHBANK (4.36%).
In value terms, GTCO dominated, representing 15.76 per cent of the total value of trades on the exchange, despite ending the day in the red.
Analysts asserted that the Nigerian equities market’s ability to reach an all-time high on Monday amidst varying global economic conditions and domestic considerations is a testament to the resilience of its underlying fundamentals and the renewed confidence of local and international investors.
However, they warned that the mixed sectoral performance and the decline in overall trading volume and value warrant careful observation. This is as while the increase in the number of deals indicates active participation, the reduced liquidity could, in the long run, impact market efficiency and price discovery.
Going forward, investors will be keenly watching for sustained institutional participation and a broadening of the rally beyond a select few blue-chip names. The trajectory of inflation, interest rates, and the government’s economic policies will continue to be crucial determinants of the market’s sustained momentum. For now, the Nigerian equities market appears to be operating in a volatile range, albeit with an upward trajectory, driven by a targeted and confident investor base.
