The market capitalisation of the Nigerian Stock Exchange (NSE) crossed N20 trillion capitalisation for the first time in the history of equity market last week, indicating an inflow of more funds into the market.
The bullish sentiment continued unabated for eight successive sessions last week, causing the All-Share Index (ASI) and market capitalisation to appreciate by 5.42 per cent to close the week at 38,800.01 and N20.279 trillion respectively.
All other indices finished higher except NSE banking, AFR Bank Value, AFR Div Yield and MERI Growth, which depreciated by 1.03 per cent, 0.95 per cent, 0.31 per cent and 0.80 per cent respectively. The NSE ASeM and NSE Growth Indices closed flat.
Analysts predict sustained rally as buying interests in highly capitalised stocks that control 70 per cent of the market capitalisation heightened. The Chief Research Officer of Investdata Consulting, Ambrose Omordion said: “Investors should, at this point, target solid stocks selling at a discount amid the ongoing cautious trading, portfolio diversification ahead of seasonal trends and expectations.
“The NSE’s index action and indicators are looking up in the same direction on a very high traded volume and positive buying sentiments.
“The current undervalued state of the market offers investors opportunities to position for the short, medium and long-term. We expect this trend to continue buying interests in highly capitalised stocks.
“We must warn at this point, that investors should not underestimate the possibility of profit-taking which is inevitable.”
Analysts at Codros Securities said:
“As the year draws to a close, we expect yield-seeking investors to take positions in stocks with attractive dividend yields, in the face of increasingly negative real returns in the fixed income market.
“However, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.”
A breakdown of trading activities showed that buying interest in Dangote Cement and 22 other stocks lifted investors’ wealth further by N334 billion on Monday.
The ASI gained 638.65 absolute points, representing a gain of 1.74 per cent to close at 37,443.40 points. The overall market capitalisation value also appreciated by N334 billion to close at N19.570 trillion.
The uptrend was driven by price appreciation in medium and large capitalised stocks such as Dangote Cement, BOC Gases Nigeria, Flour Mills of Nigeria, Lafarge Africa and PZ Cussons Nigeria.
Bulls extended their dominance in the Nigerian equity market to seventh successive sessions on Tuesday, as the ASI appreciated by 1.20 per cent.
The ASI gained 450.21 absolute points, representing a gain of 1.20 per cent to close at 37,893.61 points. Similarly, the overall market capitalisation appreciated by N235 billion to close at N19.805 trillion.
The market capitalisation of the NSE hit N20 trillion at the end of transactions on Wednesday, as sentiments remained upbeat for the eight successive sessions.
At the close of trading, the overall market capitalisation appreciated by N476 billion to close at N20.281 trillion. Similarly, the ASI gained 910.13 absolute points, representing a gain of 2.40 per cent to close at 38,803.74 points.
The Nigerian equities market reversed the positive streak to close on a downward note on Thursday, leading to a depreciation of N2 billion.
The index shed 3.73 absolute points, representing a loss of 0.01 per cent to close at 38,800.01 points.
Accordingly, investors lost N2 billion in value as market capitalisation went down to N20.279 trillion.
The downturn was impacted by losses recorded in medium and large capitalised stocks, including Lafarge Africa, Guaranty Trust Bank, Champion Breweries, United Bank for Africa (UBA) and May & Baker Nigeria.
The uptrend was driven by price appreciation in medium and large capitalised stocks such Airtel Africa, BUA Cement, Nigerian breweries, BOC Gases Nigeria and Vitafoam Nigeria.
Further analysis of last week’s transactions indicated that a total turnover of 2.756 billion shares worth N40.311 billion were recorded in 17,459 deals by investors on the floor of the exchange, in contrast to a total of 1.893 billion units, valued at N17.647 billion that was exchanged hands in 20,660 deals during the preceding week.
The financial services industry (measured by volume) led the activity chart with 2.106 billion shares valued at N19.454 billion traded in 8,327 deals; thus contributing 76.40 to the total equity turnover volume.
The consumer goods industry followed with 182.099 million shares worth N4.392 billion in 2,485 deals.
The third place was the industrial goods industry, with a turnover of 145.808 million shares worth N10.632 billion in 2,587 deals.
Trading in the top three equities namely Access Bank Plc, Zenith Bank Plc and AXA Mansard Insurance Plc (measured by volume) accounted for 1.439 billion shares worth N13.881 billion in 2,972 deals, contributing 52.23 per cent to the total equity turnover volume.
A total of 645,669 units of ETPs valued at N2.009 billion were traded last week in 33 deals compared with a total of 412,358 units valued at N1.396 billion transacted in 40 deals during the preceding week.
A total of 488 units of bonds, valued at N499,807.41 were traded this week in 11 deals compared with a total of 47,699 units valued at N53.129 million transacted last week in 22 deals.