Follow Us on Google
Owing to interest in the shares of banking stocks and consumer stocks by investors trading on the floor of the Nigerian Exchange Limited (NGX), the market’s year-to-date (YTD) gain currently stands at +13.20 per cent, sustaining its bullish run in the new trading week. The market had on Friday, closed on a positive note with its All Share Index (ASI) remaining above the 80,000-points mark, closing at 83,042.96 points.
Similarly, market capitalisation increased by N1.49 trillion, from an opening week value of N43.95 trillion to close at N45.442 trillion. As a result, year-to-date (YTD) gain stood at 11.1 per cent in local currency, making it the second-best performing market globally, trailing only Argentina.
The gain, recorded last week, was attributed to AccessCorp, GTCO, UBA and Zenith Bank. This development led to several analysts forecasting that the market is likely hit to break another record in the week and its performance would be likely dominated by the bulls, as positioning for 2023 full year earnings releases and accompanying dividends declarations should outweigh profit-taking activities. It proved to be true as bellwether stocks like Cadbury, Flourmill, Dangote Sugar, PZ and 64 other securities pushed the ASI into the green, up by 1.92 per cent to close at 84,640.89 points at the close of trading proceedings on Monday.
Also market capitalisation increased to N46.32 trillion, from an opening value of N43.95 trillion, resulting in a gain of a whooping N2.37 trillion.
Accordingly, the year-to-date (YTD) return stood at 13.20 per cent, compared with 11.1 per cent (in local currency) recorded last week, making it the second-best performing market globally, trailing only Argentina.
Currently, the banking index has surged by 16 per cent this year after hitting nearly 140 per cent in 2023. According to analysts, banks in Nigeria are benefitting from significant profits resulting from the devaluation of the Naira.
They further noted that pension funds and institutional investors are reportedly increasing their investments in equities due to expectations of record profits and positive returns from the banking sector.
Managing Director, APT Securities, Kurfi Garba, said, “We saw some banks (Zenith Bank) reporting significant foreign exchange gains, doubling profits in the nine months of 2023. Also, the negative real yields in fixed income securities have made equities relatively more attractive and that is why the equities market is growing in leaps and bounds”.
It will be recalled that Nigeria’s stock market not only gained last week, but outperformed its peers across the globe as higher-than-expected inflation data in the US and positive labour market signs tempered hopes for early Fed rate cuts.
For example, European equities (STOXX Europe: -0.8 per cent; FTSE 100: -1.5 per cent) were on track for another weekly decline, as the latest US inflation reading dampened expectations of early interest rate cuts by major central banks worldwide.
Elsewhere, performances in the Asian market (Nikkei 225: 6.6 per cent; SSE: -1.6 per cent) were mixed as the Japanese market rallied on expectations of an ultra-dovish Bank of Japan, while deflation concerns weighed on the Chinese market. Finally, the Emerging (MSCI EM: -0.7 per cent) market declined, following the bearish sentiments in China (-1.6 per cent), while the Frontier (MSCI FM: +0.3 per cent) market saw marginal gains driven by the positive performance in Vietnam (+0.2 per cent).
