Nigeria’s Stock Market Gains N711bn in Two Days on Sustained Positive Sentiments

Following a price uptick in high-capitalised stocks as well as sustained bullish trading by investors on the floor of the Nigerian Exchange Limited (NGX), the market capitalisation has risen by N711 billion in two consecutive trading sessions.
The market’s gaining streak had come to a halt on Tuesday, owing to profit-taking in Total, Presco, and 31 others.

However, renewed interest in the shares of BUA Cement, AccessCorp, and Guaranty Trust Holdings Plc (GTCO) drove the benchmark index 1.33 per cent higher at the close of trading on Wednesday.

Extending gains for the second consecutive session, the domestic bourse on Thursday, closed higher as the All Share Index (ASI) gained 0.81 per cent to close at 62,019.88 basis points on the back of gains in Dangote Cement, Zenith Bank, and Stanbic.

Furthermore, market capitalisation, which had nudged higher by N440.4 billion to close at N33.500 trillion, from N33.059 trillion in the previous trading session, gained N270 billion to close at N33.770 trillion.

This meant that the fortunes of investors have now risen to N711 billion.

Accordingly, the market remained on track for the first weekly gain in the trading month, as the year-to-date (YTD) return currently stands at 21.01 per cent.
Reacting to the development, analysts and market operators said the new administration’s foreign currency and economic reforms were bringing investors back to the stock market.

This was evident in the market’s share trading volume as the total volume and value of stocks traded increased significantly by 543.2 per cent and 821.8 per cent to 5.4 billion and N95.0 billion, respectively.

This was against 846.3 million units and N10.3 billion, which changed hands in 9,815 deals.

Banking stocks had emerged as the biggest winners, with an index of shares rising by 23 per cent last month, the most since 2018.

This has continued this month with banks dominating the activity chart in trading sessions. FBN Holdings sold 4.69 billion shares valued at N87.8 billion, FCMB was next, selling 126.76 million shares valued at N744.09 million while AccessCorp transacted 56.48 million shares valued at N1.02 billion.

Investors’ appetite for stocks was huge, as 54 equities appreciated in value while 18 others depreciated. Conoil Plc and Eterna led the gainers’ chart with 10 percent gains to close at N102.30 and N25.85 per share, respectively. Learn Africa followed with 10 percent to close at N3.52, MRS Oil garnered 10 percent to close at N91.30, and Union Bank of Nigeria gained 10 percent to close at N8.25.

Managing Director, Morgan Capital Securities Limited, Mr. Rotimi Olubi, in a chat with THISDAY said, “The factor which has rallied the market has been the easing in the political risk post-election, pro- oil&  gas downstream regulatory reforms, suspension of the CBN governor, as well some pronouncements by the new administration.

“Speculations around reductions in cash reserve requirement (CRR) debits have tilted bullish sentiment towards banking stocks, with expected increased liquidity, yields in the fixed income market should take a hit.”

He added that “Going forward, we expect the market to see positive sentiment, but could be halted upon the release of the Q2:2023 GDP, fading of the new administration jolted to the market, and retained hawkish stance on monetary policy.

“On the balance of factors, the market is expected to see a positive close, albeit less than 2022.”

Kayode Tokede

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