Equities Market Gains N1.7 trillion
Renewed investor confidence, supported by strong macroeconomic fundamentals, propelled the Nigerian equities market to new heights last week, adding a substantial N1.7 trillion to its market capitalisation.
The bullish momentum pushed several stocks to fresh 52-week highs and drove the all-share index (ASI) up by 2.49 per cent week-on-week, closing at 111,742.01 points.
The rally reached a symbolic milestone midweek as the ASI broke through the psychological barrier of 112,000 points for the first time in history, peaking at 112,237.26 points before mild profit-taking moderated the gains. Market capitalisation also rose by 2.49 per cent to an unprecedented N70.46 trillion.
However, while the overall trade value surged by nearly 60 percent to N119.19 billion, indicating a shift towards high-value stock accumulation, the total number of deals fell by 14.9 percent to 89,380 and the total volume of traded shares dipped by 3.51 per cent to 3.78 billion units.
This divergence suggests investors are becoming more selective, focusing on quality equities, particularly blue-chip and large-cap stocks with strong growth prospects.
Sector performance remained broadly positive, although not without exception. The consumer goods sector led the charge with a 3.78 per cent weekly gain, propelled by increased demand for food and beverage stocks.
The insurance and banking indices followed with modest gains of 1.02 per cent and 0.66 per cent respectively, supported by price recoveries in leading financial institutions. The industrial and commodity indices also posted minor advances. In contrast, the oil and gas sector declined by 2.05 percent, largely due todue to profit-taking in key players such as Seplat, MRS Oil and Conoil.
Stock-specific movements played a critical role in shaping the week’s market trajectory. Notable gainers included NAHCO, Aradel, Airtel Africa, Okomu Oil, Guinea Insurance, Honeywell Flour Mills, Livestock Feeds, Ecobank Transnational Inc., AXA Mansard, Zenith Bank, Fidelity Bank, Custodian Investment, SCOA and RT Briscoe. These counters benefited from improved earnings outlooks, expectations of corporate actions, and positive developments in their respective sectors.
Among the top-performing stocks of the week was Universal Insurance Plc, which rose by 35.3 percent, followed by Red Star Express Plc with a 24 percent gain. Other standout performers included Omatek Ventures, ABC Transport, and Northern Nigeria Flour Mills, which recorded weekly advances of 20 percent, 18.5 percent, and 17 per cent respectively.
On the flip side, some stocks faced significant pressure. Abbey Mortgage Bank lost 26.9 percent of its value, while Legend Internet, Enamelware, International Medical Group and Multiverse Mining and Exploration also posted double-digit losses.
A total of 3.8 billion shares valued at N119.4 billion were traded in 89,636 transactions, higher than 3.9 billion units valued at N74.8 billion that exchanged in 105,220 deals during the preceding week.
The financial services sector dominated trading, accounting for 2.7 billion shares exchanged for N79.8 billion in 36,458 deals, representing 72.3 per cent of the total volume and 66.8 per cent of the total value traded during the week.
The consumer goods sector followed, with 201.8 million shares worth N7.6 billion exchanged in 11,922 transactions. The services sector came in third, recording a turnover of 173.7 million shares valued at N1.7 billion in 6,385 deals.
Among individual equities, United Bank for Africa Plc, Fidelity Bank Plc and Access Holdings Plc led the charts. Together, these three stocks accounted for 1.9 billion shares valued at N61.5 billion traded in 12,443 deals, contributing 51.2 per cent of total turnover by volume.
Their strong performance underscores sustained investor interest in the banking space, particularly in stocks with strong fundamentals and liquidity.
Looking ahead, market sentiment remains cautiously optimistic. The approaching end of the second quarter is expected to spur continued strategic accumulation, particularly by institutional investors positioning for the upcoming earnings season.
According to them, defensive and fundamentally strong stocks are likely to remain in focus as investors seek value in anticipation of dividend announcements and capital gains.
Analysts at Cowry Asset Management anticipate that the bullish trend in the Nigerian stock market is likely to persist in the coming week, supported by continued investor interest in fundamentally strong and defensive stocks.
According to them, the proximity to the end of the second quarter is prompting strategic accumulation, particularly by institutional investors seeking exposure to dividend-paying and growth-oriented equities ahead of the half-year earnings season.
They noted that current macroeconomic conditions and policy fundamentals remain supportive of equities, creating a favourable backdrop for sustained market gains. With momentum on the side of the Nigerian Exchange (NGX), Cowry Asset Management believes that the market is well-positioned for further upside in the short term.
However, they also caution that as valuations rise, investors should adopt a more measured approach.The analyats also pointed out that portfolio managers are expected to increasingly prioritise stocks with resilient earnings, strong balance sheets, and solid fundamentals to mitigate risk and ensure long-term value preservation amid the evolving market landscape.
