Market indicators soared significantly at the end of last week’s transactions, following bargain hunting in some banking stocks ahead of the first quarter (Q1) earnings.
The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and market capitalisation appreciated by 1.27 per cent to close the week at 39,301.82 and N20.568 trillion respectively.
Other indices finished higher except the NSE Sovereign Bond Index which depreciated by 0.94 per cent while the NSE ASeM and NSE Growth indices closed flat.
Analysts said investor confidence is gradually rekindled as more companies release their quarterly scorecards to point a direction for the current financial year.
The Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion, said: “We see the ongoing Q1 earnings season influencing the market, considering the undervalued state of some stocks with the potential to outperform inflation, as well as yields in Treasury Bills (TBs) and bonds, given that capital gains and dividend rewards that associated with stock market investing and trading.
“Investdata expects equity market players to invest wisely, guided by set investment objectives, especially entry and exit strategies necessary to survive and profit from the expected new trend.”
Codros Capital Limited said: “In the week ahead, we expect NSE’s floor to be flooded with results as the Q1-2021 earnings season commences in full swing. We believe investors will be looking for clues on how corporate earnings will evolve in 2021, given the expected improvement in macroeconomic conditions.
“The local bourse is likely to close positive next week as we expect decent earnings releases across the board to temper selling activities stoked by the rising yields in the FI market.
“Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro story remains a significant headwind for corporate earnings.”
A review of transactions last wèek showed that gains recorded by many blue-chip stocks, especially First City Monument Bank (FCMB) and Northern Nigeria Flour Mills (NNFM), stimulated transactions on the NGX on Monday, causing market capitalisation to appreciate by N21 billion.
The ASI gained 40.01 absolute points, up by 0.10 per cent, to close at 38,848.02 points. Similarly, the overall market capitalisation value rose by N21 billion to close at N20.331 trillion.
The upturn was also driven by price appreciation in medium and large capitalised stocks amongst such as UAC of Nigeria (UACN), NNFM, Guaranty Trust Bank, MTN Nigeria Communications (MTNN) and FCMB Group.
The Nigerian equities market extended bullish to Tuesday, as more highly-capitalised (highcap) stocks appreciated at price, resulting in a further rise in the ASI by 0.43 per cent.
At the close of transactions, the ASI grew by 167.56 absolute points, representing a growth of 0.43 per cent to close at 39,015.58 points while market capitalisation gained N88 billion to close at N20.419 trillion.
The improved performance was driven by price appreciation in large and medium capitalised stocks amongst which are: MTN Nigeria Communications, Zenith Bank, Guaranty Trust Bank, PZ Cussons Nigeria and Ardova Plc.
Trading on the NGX sustained a rising profile on Thursday, following gains recorded in most bluechip stocks, as the ASI appreciated by 0.01 per cent.
The ASI grew by 3.46 absolute points, representing a growth of 0.01 per cent to close at 39,131.80 points. Market capitalisation also gained by N1 billion to close at N20.479 trillion.
The upward trend was sustained, following buy-interest in the oil and gas sector. The sectoral index advanced 0.2 per cent following the price uptick in Oando Plc.
Last week, a turnover of 1.602 billion shares worth N42.142 billion was recorded in 19,507 deals by investors on the floor of the exchange, in contrast to a total of 1.263 billion shares valued at N10.759 billion that changed hands in 19,975 deals during the preceding week.
The financial services industry (measured by volume) led the activity chart with 1.029 billion shares valued at N9.188 billion traded in 11,095 deals; thus contributing 64.22 per cent to the total equity turnover volume.
The ICT Industry followed with 215.482 million shares worth N29.855 billion in 566 deals.
The third place was conglomerates industry, with a turnover of 118.458 million shares worth N675.954 million in 1,088 deals.
Trading in the top three equities namely Fidelity Bank Plc, MTN Nigeria Communications Plc and Guaranty Trust Bank Plc (measured by volume) accounted for 580.760 million shares worth N34.392 billion in 3,197 deals, contributing 36.25 per cent to the total equity turnover volume. 39 equities appreciated during the week, 18 equities in the previous week.
24 equities depreciated lower than 47 equities in the previous week, while 99 equities remained unchanged, higher than 97 equities recorded in the previous week.