In a week marked by anxiety ahead of the 2023 General Elections, the Stock Market section of the Nigerian Exchange Limited (NGX) posted a positive closing market capitalization of N624 Billion.
To conclude at 54,949.21 basis points, the NGX All-Share Index increased by 2.13 percent week over week (W-o-W). The market value rose by N624 billion to N29.934 Trillion at the end of the week.
With the exception of the insurance index, which finished the week in a quiet mode, most of the sectoral indices’ performance was positive last week. This was largely due to increased funding flows into the equity market and ongoing buying sentiments.
In the meantime, the NGX Consumer Goods index experienced positive price movement, rising by 6.30%. Through the week, the NGX Oil & Gas index increased by 2.73 percent, the NGX Banking index increased by 2.21 percent, and the NGX Industrial Goods index increased by 0.34 percent as investors expressed their anticipation for the early filers from these sectors to begin releasing their 2022 full-year financial statements to the market.
39 stocks saw their prices rise, 22 saw their prices fall, and 96 saw no change in price, resulting in positive market breadth for the week. MRS Oil Nigeria, which closed at N30.55 per share, topped the gainers chart by 32.83 percent.
Following John Holt, Tripple Gee and Company had gains of 31.66 percent and 32.33 percent, respectively, to close at N2.62 and N1.76, respectively, per share.
The decliners table was headed by Capital Hotel, which closed at N2.50 per share and lost 9.42% of its value. Vitafoam Nigeria was the next to close down, losing 7.18% to N19.40, and Neimeth International Pharmaceuticals was down, 6.45%, to N1.45 per share.
Investors traded a total of 799.848 million shares worth N29.354 billion in 14,194 deals last week on the Exchange’s trading floor, compared to the N20.575 billion worth of 751.990 million shares that changed hands in 15,822 deals the week before.
Despite the positive outlook among investors, analysts predicted cautious trading this week as post-election scenarios come into question.
The strong sentiment and buying activity shown across all classes of stocks with a history of dividend payment had sustained the upswing. The NGX remains cheerful during the Nigerian election season of 2023 and marks a complete change of patterns in the history of Nigeria’s stock market.
At the end of the week and ahead of the Saturday presidential and governorship elections, the domestic bourse trades at a 16-year high, breaking out the recent resistance levels of 54, 290.84 basis points on buying pressure amid the uptick seen in the fixed income market rates and yields. This is happening as stock market investors analyze the most recent macroeconomic data on Nigeria’s economic performance in 2022 and the lingering cash crunch around the economy.
Cordros Securities Limited said “we believe investors will be focused on the outcome of the highly anticipated 2023 Presidential elections. Thus, we see more of a ‘choppy theme’ as cautious trading dominates the trading activities.
“Overall, we advise investors to seek trading opportunities in only fundamentally sound stocks as the weak macro story remains a significant headwind for corporate earnings.”
Analysts at Cowry Assets Management Ltd predicted that as market participants digested the 3.52 percent Q4 GDP number and the results of the presidential and national assembly elections started to come in, a mixed and upbeat sentiment would persist throughout the coming week.
“Also, the recent uptick in rates seen in the fixed income market at the end of the last treasury bills auction in the midst of corporate earnings expectation, portfolio rebalancing and elections jittery are expected to drive sentiments in the market.
“However, we advise investors to trade companies with sound fundamentals and, as such, should take advantage of price corrections in line with domestic and global trends,” they said.
