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Nigeria: Market Gains N224bn On Sustained Bullish Trading

The equities market maintained its positive performance for the second week running as investors swooped on stocks with attractive dividend yields ahead of first half (H1) 2021 interim declarations.

The high demand lifted the Nigerian Exchange (NGX) Limited All-Share Index (ASI) by 1.11 per cent to close at 39,156.28, while market capitalisation gained N224 billion to close at N20.409 trillion.

The market had rebounded the previous week after declining in May. Analysts had attributed the decline in May partly to indecision among traders despite better than expected corporate earnings in the midst of weak economic data and rising insecurity challenges.

“The low traded volume and mixed sentiment for the Month may is a reflection of inactive position of institutional investors as recovery yields in the fixed income space is diverting funds from the stock market,” an analyst had said.

However, the trend changed in first week of June as investors took position in expectation that interim dividends for H1 2021 would begin to roll in soon. The market extended its bullish trend to last week, leading to a gain of N224 billion.

And analysts in Cordros Securities stated that they expect investors to continue cherry-picking stocks ahead of the H1-2021 dividend declarations this week.

“With the recent development in the FI market, we are approaching an inflexion point; we, therefore, see scope for increased buying interest from risk-averse investors. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the unimpressive macro story remains a significant headwind for corporate earnings,” they said.

Also, the value of trading increased last week as investors staked N12.831 billion on 1.058 billion shares in 17,854 deals, up from N N9.548 billion invested in 1.082 billion shares exchanged in 17,933 deals the previous week.

Meanwhile, the Financial Services Industry remained the most active with 714.677 million shares valued at N5.951 billion traded in 9,718 deals, It thus contributed 67.53 per cent and 46.38 per cent to the total equity turnover volume and value respectively. The Consumer Goods Industry followed with 97.181 million shares worth N3.297 billion in 3,006 deals, while the third place was occupied by ICT Industry, with a turnover of 75.987 million shares worth N583.715 million in 679 deals. Trading in the top three equities namely Zenith Bank Plc, Sterling Bank Plc and Fidelity Bank Plc accounted for 261.344 million shares worth N2.712 billion in 2,862 deals.

Meanwhile, the price movement chart showed 35 equities that appreciated last week, higher than 33 in the previous week, while 36 equities depreciated, higher than 33 equities in the previous week. Cutix Plc led the price gainers with 23.5 per cent, trailed by Okomu Oil Palm Plc with 20.7 per cent. Morison Industries Plc and Conoil Plc chalked up 9.7 per cent and 9.6 per cent respectively.

Conversely, CWG Plc led the price losers with 26.1 per cent, followed by FTN Cocoa Processors Plc with 15.3 per cent. NEM Insurance Plc and Juli Plc shed 13.4 per cent and 9.9 per cent in that order.