The Nigerian equities market witnessed a significant increase of about N2.12 trillion over the weekend, signifying a renewed rally that has offset the capital flight caused by the recent hike in the benchmark interest rate.
Gatekeepers News reports that the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) had increased the benchmark interest rate, also known as the Monetary Policy rate (MPR), by 400 basis points to 22.75 per cent, which had led to a selloff at the equities market.
However, the equities market has seen a resurgence, with more than two-thirds of transactions last week closing at higher prices and an average return of 3.71 per cent for the week.
This rally was primarily driven by gains in the banking sector, which recorded a double-digit return of 12.84 per cent, the highest by any index.
As a result, the average year-to-date return for the equities market is now at 40.54 per cent, implying that investors have gained about N16.59 trillion in net capital gains so far this year.
Nigerian equities are currently the best-performing market globally, according to data tracked from Bloomberg and other global platforms.
The All Share Index (ASI), which tracks all share prices at the Nigerian Exchange (NGX), closed the weekend at 105,085.25 points. This is a significant increase from the week’s opening index of 101,330.85 points, having opened the year at 74,773.77 points.
The aggregate market value of all quoted equities also rose significantly from the week’s opening value of N57.293 trillion to close the weekend at N59.416 trillion. It had opened the year at N40.918 trillion.
During the week, there were 55 gainers to 24 losers, compared with 22 gainers and 56 losers recorded in the previous week.
Julius Berger recorded the highest gain with 30.58 per cent, followed by Omatek Ventures with a gain of 23.08 per cent and MTN Nigeria Communications with a gain of 20.96 per cent.
On the other hand, International Energy Insurance led the losers with a drop of 27.38 per cent, followed by SUNU Assurances Nigeria with a loss of 19.11 per cent and LASACO Assurance with a decline of 14.53 per cent.
The financial services sector was the most active sector, with 1.136 billion shares valued at N23.185 billion traded in 19,896 deals, contributing 64.04 per cent and 43.86 per cent to the total equity turnover volume and value, respectively.
The conglomerates sector followed with 339.390 million shares worth N5.874 billion in 3,650 deals, while the consumer goods sector placed third with a turnover of 82.645 million shares worth N6.724 billion in 6,155 deals. The three most active stocks were Transnational Corporation Plc, Guaranty Trust Holding Company Plc, and Access Holdings Plc, accounting for 677.439 million shares worth N17.287 billion in 7,789 deals, contributing 38.21 per cent and 32.70 per cent to the total equity turnover volume and value, respectively.
Analysts predicted that the market would remain positive as investors await dividend announcements of several major stocks.
Analysts at Afrinvest Securities said they expected the market to “sustain the bullish momentum barring any shock”.
Analysts at Cordros Securities stated that dividend announcements could spur the market to a higher rally.
“We expect investors to continue to cherry-pick fundamentally sound stocks, given the absence of any significant positive catalysts. However, the awaited earnings releases from the banks and accompanying dividend declarations may catalyse another rush of positive sentiments, supporting buying activities on the bourse,” Cordros Securities stated.
