BULLISH MOMENTUM IN NIGERIAN STOCK MARKET DESPITE BELOW-PAR GDP GROWTH

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The Nigerian stock market continues to exhibit a bullish trend, defying lackluster GDP figures. Despite the Gross Domestic Product (GDP) report showing a meager 2.51% growth in the second quarter of 2023, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) surged by 1.3% week-on-week to reach 65,558.91 points.

Investors showed keen interest in specific sectors, with BUA Foods experiencing a 7.9% rise, Dangote Sugar soaring by 35.7%, and Transcorp making significant gains of 39.4%. As a result, both the Month-to-Date (MtD) and Year-to-Date (YtD) gains increased to 0.6% and 26.3% respectively.

The Consumer Goods Index witnessed an impressive 11.6% increase, while the Insurance Index saw a 1.20% rise. However, the Banking Index dipped by -3.6%, and the Oil and Gas Index faced a decline of -2.4%, while the Industrial Goods Index remained stable.

Market analysts from Cordros Research predict that investor sentiment will be shaped by macroeconomic developments and fixed-income market movements. They emphasize the importance of investing in fundamentally strong stocks due to the challenging macro environment affecting corporate earnings.

Cowry Asset Management Limited analysts expect the buoyant market sentiment to persist, supported by positive economic data showcasing Nigeria’s commendable output performance. They highlighted the impact of Treasury bill(T-bill) rates and the ongoing interest in bargains and portfolio realignments on market dynamics.

InvestData Consulting analysts anticipate mixed sentiment in response to high T-bill rates and a hyperinflationary environment. They also mentioned the anticipation of first-tier banks’ earnings reports and the continuation of sector rotation.

Despite uninspiring GDP figures, the Nigerian stock market maintains its upward trajectory; propelled by strategic sectoral investments and a favorable market outlook.

 

 

 

 

 

 

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