By Chinwendu Obienyi and Chukwuma Umeorah
Listings done at the Nigerian Exchange Limited (NGX) crossed the N6 trillion mark at the end of October amid the uptick in capital market activity in the second half of 2023.
According to the X-Compliance report of NGX Regulation Limited (NGX RegCo), total equity, fixed income, exchange traded funds and mutual funds listed on NGX year-to-date as of October ending totaled N6.23 trillion.
This was majorly because of fixed income listings by the Federal Government of Nigeria which rose dramatically in October. FGN fixed income listings consist of FGN Bonds, FGN Savings Bonds and Sukuk bonds. This amounted to N6.08 trillion year-to-date (YTD).
Also, the exchange admitted VFD Group and Nigeria Infrastructure Debt Fund (NIDF) at market capitalisations of N46.5 billion and N92.54 billion respectively, in October representing the major equity listings on NGX in 2023.
Lagos State Government remains the only sub-national entity to raise capital on the exchange as its debt issuances hit N157.15 billion. Other notable listings came from Dangote Industries Funding Plc, LFCZ Funding SPV Plc among others.
Meanwhile, the bullish momentum in the local stock market intensified as investors’ cherry-picked stocks driven by positive sentiments surrounding FX liquidity and corporate earnings. This surge propelled the market’s pricing gauge to a historic high, with the All-Share Index remaining above the 70,000-points mark breached last week, closing the week at 70,196.77 points.
Notably, increased investors’ interest in Airtel Africa (+27.9 per cent), Dangote Cement (+5.8 per cent) and Stanbic (+10.7 per cent) resulted in a 4.6 per cent surge in the benchmark index and elevated the YTD gain to 37.0 per cent. Furthermore, market capitalisation closed at N38.557 trillion.
Sectoral performance was broadly positive following gains in the Insurance (+8.0 per cent), Banking (+2.7 per cent), Consumer Goods (+0.5 per cent) and Industrial Goods (+0.7 per cent) indices. Meanwhile, the Oil and Gas index closed flat.
Market activity levels also reflected this positive trend, as the total volume and value traded increased by 65.6 per cent week-on-week (w/w) and 64.4 per cent w/w, respectively. A total turnover of 2.451 billion shares worth N40.570 billion in 37,959 deals was traded by investors on the floor of the Exchange, in contrast to a total of 1.446 billion shares valued at N25.418 billion that exchanged hands last week in 28,933 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.480 billion shares valued at N21.160 billion traded in 16,671 deals; thus contributing 60.39 per cent and 52.16 per cent to the total equity turnover volume and value respectively.
The Oil and Gas Industry followed with 354.911 million shares worth N1.214 billion in 2,917 deals while the ICT Industry recorded a turnover of 175.216 million shares worth N8.218 billion in 3,759 deals.
Trading in the top three equities namely Japual Gold & Ventures Plc, United Bank for Africa Plc and Fidelity Bank Plc (measured by volume) accounted for 835.584 million shares worth N8.631 billion in 5,514 deals, contributing 34.09 per cent and 21.27 per cent to the total equity turnover volume and value respectively.
Commenting on the development, analysts at Cordros Capital, said they expect investors to continue to rotate their portfolios toward stocks that reported strong earnings this new trading week.
They said,”Thus, we see scope for the bulls to maintain dominance, though the magnitude of the gains may be lower, as profit takers are likely to book profits. Notwithstanding, we reiterate that investors should seek trading opportunities in fundamentally sound stocks as the weak macroeconomic environment remains a significant headwind to corporate earnings”.