After October Loss, Nigerian Equities Regain Rally With N194bn Gain

After losing a whopping N2.8 trillion in October 2022, Nigerian equities saw a modest recovery in the first week of November as renewed bargain-hunting drove the market to net capital gain of N194 billion at the weekend.

Benchmark indices at the Nigerian Exchange (NGX) at the weekend indicated average return of 081 per cent, equivalent to net capital gain of N194 billion for the week. The renewed rally nudged the average year-to-date return to 3.63 per cent, putting Nigerian stocks as the sixth best-performing shares globally.

The All Share Index (ASI)- the common value-based index that tracks all share prices at the NGX closed weekend at 44,269.18 points as against the week’s opening index of 43,912.64 points. Aggregate market value of all quoted equities also rose simultaneously from its week’s opening value of N23.918 trillion to close weekend at N24.112 trillion.

Access Holdings Plc headlined trading activities during the week as the most traded stock, followed by FTN Cocoa Processors and Fidelity Bank. The three most active stocks accounted for 800.622 million shares worth N3.373 billion in 2,051 deals, contributing 56.76 per cent and 21.75 per cent to the total equity turnover volume and value respectively.

The momentum of activities improved considerably during the week with total turnover rising to 1.410 billion shares worth N15.510 billion in 19,025 deals as against a total of 598.817 million shares valued at N14.234 billion traded in 15,859 deals two weeks ago.

The financial services sector led the activity chart with 804.570 million shares valued at N6.300 billion in 9,922 deals; thus contributing 57.04 per cent and 40.62 per cent to the total equity turnover volume and value respectively. Agriculture sector followed with 357.623 million shares worth N287.992 million in 560 deals while conglomerates sector placed third with a turnover of 68.309 million shares worth N97.051 million in 530 deals.

Most analysts were optimistic on the outlook of the market in the meantime. Analysts at Afrinvest Securities said they expected “bargain-hunting activities to drive marginal gains” in the days ahead.

“Looking ahead, we expect investors to rebalance their portfolios based on an assessment of corporate earnings released for third quarter 2022. However, the increased fixed-income yields may continue to constrain buying activities.

“Consequently, we expect market performance to remain mixed in the week ahead as investors rotate their portfolios towards stocks with attractive dividend yields amid intermittent profit-taking activities. Overall, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings,” Analysts at Cordros Securities stated at the weekend.

However, with more than two decliners for every advancer, the positive overall market situation was driven largely by gains recorded in the cement segment of the industrial goods sector. Most sectoral indices closed weekend negative, underlining the negative sentiment across many sectors. The NGX Banking Index dropped by 1.87 per cent. The NGX Oil and Gas Index declined by 5.37 per cent. The NGX Insurance Index depreciated by 1.35 per cent.

The NGX Consumer Goods Index dipped by 2.32 per cent while the NGX Pension Index, which tracked stocks that meet pension funds investment guidelines, dropped by 0.44 per cent. On the positive side, the NGX Industrial Goods Index rode on the back of gains by Dangote Cement to close with average return of 5.35 per cent. The NG 30 Index- which tracks the 30 largest stocks at the NGX also appreciated by 1.15 per cent while the NGX Lotus Islamic Index- which tracks stocks that comply with Islamic investment rules, gained 2.02 per cent.

There were 20 gainers to 43 losers last week as against 29 gainers and 31 losers recorded in the previous week. FTN Cocoa Processors led the gainers with a gain of 13.33 per cent to close at 34 kobo. Nigerian Aviation Handling Company followed with a gain of 10.47 per cent to close at N5.70 per share. Dangote Cement appreciated by 8.84 per cent to close at N240. Courteville Business Solutions rose by 8.70 per cent to close at 50 kobo. Regency Assurance added 8.33 per cent to close at 26 kobo while NEM Insurance and Trans-Nationwide Express rose by 6.67 per cent each to close at N4 and 80 kobo respectively.

On the negative side, Chams Holding Company led the losers with a drop of 1481 per cent to close at 23 kobo per share. Ikeja Hotel followed with a loss of 12.96 per cent to close at 94 kobo. Cornerstone Insurance dropped by 12 per cent to close at 44 kobo. Sovereign Trust Insurance declined by 10.71 per cent to close at 25 kobo. Livestock Feeds declined by 10.62 per cent to N1.01 while Caverton Offshore Support Group slipped by 10.31 per cent to 87 kobo per share.