Ahead of Santa Claus’ rally, equities record marginal gains

Ahead of the Santa Claus and year-end rally, expected to usher in a bullish run, especially with the undervalued situation of the Nigerian Stock Exchange (NSE), indices closed last week on the upbeat.

The All-Share Index (ASI) and market capitalisation appreciated by 0.04 per cent to end the week at 27,002.15 points and N13.033 trillion respectively.

Also, all other indices finished lower with the exception of NSE Main Board, NSE-AFR Div Yield, NSE Meri Growth, NSE Consumer Goods, NSE Lotus II and NSE Industrial Goods indices, which appreciated by 1.83 per cent , 2.21 per cent 1.81 per cent , 4.69 per cent, 2.72 per cent and 0.35 per cent respectively, while the NSE ASeM Index closed flat.

Analyst expressed optimism that the recently released Gross Domestic Product of 2.28 per cent and expanding credit by banks to the real sector would keep the growth tempo.

According to them, this credit expansion of credit by banks are also expected to boost consumer and investor confidence to increase consumption and buying interests in equities as they spend more money this season.

Analysts at Codros Capital Limited said: “We expect trading volumes to start to temper in the NTB market, as the average yield trends towards the single-digit level.

“However, the average OMO yield is expected to remain around the same level, moderately paring in the coming week. Overall, we expect overall volumes in the market to pare and market participants to take positions in Treasury bonds as has been witnessed over the past few weeks.”

Vetiva Capital Limited also said: “Going into the new week, we anticipate weaker performance in the local bourse as investors are expected to take profit.”

The Chief Research Officer of lnvestdata Consulting Limited, Ambrose Omodion, added: “Going forward, there is a possibility that lagging sectors could offer the best investment opportunities yet for year-end positioning and beyond. As we have always maintained, traders and investors should not panic out of their position.

Last week, a total turnover of 1.161 billion shares worth N13.174 billion were transacted in 18,142 deals by investors on the floor of the exchange in contrast to a total of 1.416 billion shares valued at N17.249 billion that changed hands last week in 20,303 deals during the preceding week.

The financial services industry (measured by volume) led the activity chart with 801.229 million shares valued at N6.219 billion traded in 10,415 deals; thus contributing 68.98 per cent to the total equity turnover volume and value respectively.

The conglomerate industry followed with 139.940 million shares worth N585.927 million in 943 deals. The Consumer Goods industry ranked third with a turnover of 84.546 million shares worth N3.445 billion in 2,674 deals.

Trading in the top three equities namely, Law Union & Rock Insurance Plc, Zenith Bank Plc and United Bank for Africa Plc. (measured by volume) accounted for 369.396 million shares worth N3.086 billion in 3,360 deals, contributing 31.80 per cent to the total equity turnover volume.

ETPs, a total of 11,991 units valued at N102,312.34 were traded this week in 30 deals, compared with a total of 150 units valued at N15,929.60 transacted last week in nine deals.

A total of 313,912 units of Federal Government Bonds valued at N320.719 million were traded this week in 23 deals, compared with a total of 42,085 units valued at N47.490 million transacted last week in 30 deals.

Also, 31 equities appreciated at price during the week, lower than 40 equities in the previous week and 32 equities depreciated in price, higher than 23 equities in the previous week, while 102 equities remained unchanged like the preceding week.