Investors pocket N3.72trn as stock market rises 2.36%

Investors in the Nigerian equities market gained about N3.72 trillion last week as renewed buying interest lifted the market’s All-Share Index (ASI) by 2.36 per cent to close at 246,992.44 points.

The rise pushed the total market capitalisation to N159.56 trillion, while the market’s year-to-date return improved to 58.72 per cent. The market rally came amid stronger trading activity and broad-based gains across major sectors, with buying interest particularly strong in oil and gas, consumer goods, insurance and banking stocks.

Trading activity also increased significantly during the week ended September 4, with investors exchanging 4.36 billion shares valued at N210.33 billion in 223,284 deals, compared with 2.51 billion shares worth N123.22 billion in 173,561 deals in the previous week.

The increase represented a sharp rise in market activity, with weekly volume up by about 74 per cent and transaction value rising by more than 70 per cent. The number of deals also increased by about 29 per cent week-on-week (WoW). Cowry Asset Management similarly reported that deals, trading volume and transaction value rose by 28.69 per cent, 73.93 per cent and 70.73 per cent respectively.

The positive market performance was also reflected in market breadth, as 56 equities appreciated during the week, compared with 24 in the previous week. Thirty-five equities declined, down from 55 in the preceding week, while 56 remained unchanged, compared with 68 previously.

The NGX Oil/Gas Index led the sectoral gainers, rising 9.10 per cent during the week, followed by the Consumer Goods Index, which gained 4.47 per cent. The Insurance Index rose 3.85 per cent, while the Banking Index advanced 3.58 per cent.

The NGX Premium Index also gained 3.73 per cent, the Pension Index rose 3.66 per cent, the NGX 30 Index increased 2.42 per cent and the Main Board Index advanced 1.44 per cent. The Industrial Goods Index was the only major sectoral decliner, falling 0.35 per cent.

Cowry attributed the sectoral performance to renewed buying interest in selected counters. It said “the Oil & Gas sector was driven by buying interest in Oando, Seplat and Aradel, while gains in the Consumer Goods sector were supported by Champion Breweries, Nigerian Breweries and McNichols. Insurance stocks including Royal Exchange, WAPIC and Sunu Assurances also recorded strong demand, while banking stocks such as ETI, FCMB, Zenith Bank and Fidelity Bank advanced during the week.”

Royal Exchange Plc emerged as the best-performing stock during the week, rising 25 per cent from N0.88 to N1.10 per share. Champion Breweries followed with a 20.10 per cent gain, moving from N9.95 to N11.95, while Nigerian Breweries rose 18.80 per cent from N69.40 to N82.45.

Coronation Insurance gained 17.07 per cent to close at N2.40, McNichols Consolidated rose 16.67 per cent to N5.25, while Sunu Assurances appreciated 15.85 per cent to N3.29. Zichis Agro-Allied Industries, Ellah Lakes, Omatek Ventures and Daar Communications also recorded double-digit gains.

At the other end of the market, Beta Glass recorded the biggest decline, falling 17.38 per cent from N562.80 to N465. Nascon Allied Industries dropped 15.90 per cent to N164, while Red Star Express declined 13.62 per cent to N13.95.

R.T. Briscoe fell 13.16 per cent, University Press declined 12.28 per cent and Industrial and Medical Gases lost 9.97 per cent. Academy Press, Juli, ABC Transport and Abbey Mortgage Bank also recorded declines of between 9.41 per cent and 9.76 per cent.

The Financial Services Industry remained the dominant force in trading volume, accounting for 3.58 billion shares worth N88.64 billion in 99,488 deals. It contributed 82.10 per cent of total equity turnover volume and 42.14 per cent of turnover value.

Consumer Goods followed with 188.04 million shares valued at N15.34 billion, while the Services sector recorded 142.29 million shares worth N2.02 billion. The three most traded equities—Fortis Global Insurance, United Bank for Africa and Access Holdings—accounted for 2.29 billion shares worth N35.23 billion, representing 52.46 per cent of total equity turnover volume.

The market’s performance also followed renewed investor interest after confirmation of Nigeria’s reclassification by FTSE Russell. Cowry said the confirmation, alongside sustained buying pressure in selected counters, supported investor sentiment during the week.

The equities market entered September with gains after recording a strong performance in August, with the latest advance taking the ASI to 246,992.44 points. The index gained 5,693.97 points during the week, representing a 2.36 per cent increase. Its month-to-date return stood at 1.14 per cent, quarter-to-date return at 7.66 per cent and year-to-date return at 58.72 per cent.

Other market indices also closed higher.

The NGX Consumer Goods Index gained 4.47 per cent, the Premium Index 3.73 per cent, the Banking Index 3.58 per cent and the Pension Index 3.66 per cent. The Oil/Gas Index recorded the strongest weekly performance at 9.10 per cent, taking its year-to-date gain to 111.86 per cent.

Alongside the price gains, the Exchange recorded several fresh share listings during the week following capital-raising exercises by listed companies. Coronation Insurance listed an additional 4.53 billion ordinary shares arising from a private placement, increasing its issued and fully paid-up share capital from 23.99 billion to 28.53 billion shares.

Sterling Financial Holdings also listed 2.57 billion additional shares from a private placement, increasing its issued shares from 65.93 billion to 68.50 billion. Sovereign Trust Insurance listed 2.51 billion shares from a rights issue, while Sunu Assurances listed 2.08 billion shares from its rights issue.

The market’s strong weekly performance has, however, left investors facing the possibility of profit-taking after the substantial gains recorded so far this year. Cowry expects the near-term outlook to remain cautiously bullish but warned that the market’s strong year-to-date performance could trigger some profit-taking and short-term volatility.

It said “investors are likely to remain selective, with attention focused on fundamentally strong and liquid large- and mid-cap stocks.”