Investors gain over N2.5tr in October despite gloomy outlook

Despite rising uncertainty, investors’ fortune soared significantly in October as bargain hunting and repositioning for interim dividends by blue-chip companies lifted market capitalisation by N2.54 trillion.

Contrary to experts’ predictions that elevated yields in the fixed-income market would continue to constrain activities in the equities sector of the exchange, October was eventful occasioned by a rally witnessed by some key sectors.

Specifically, the market capitalisation of listed equities opened for transactions at N56.63 trillion, closed at N59.17 trillion yesterday, up by N2.54 trillion or 4.3 per cent. The all-share index, which measures the performance of listed equities, stood at 97,651.23 points from 98,558.79 points recorded in September representing a decline of 0.1 per cent.

Operators attributed the marginal decline in the index to persistent profit-taking by investors as they leveraged the current price appreciation to recoup their investments.

According to operators, the influx of impressive corporate earnings reports for the 2024 third quarter and nine months result of listed firms, especially in financial, oil and gas and services sector stocks, spurred market activities and propelled the stellar performance recorded during the week as liquidity continued to flow steadily into the market.

For instance, Seplat’s unaudited third quarter (Q3, 2024) showed a 532.1 per cent rise in profit before tax (PBT) to N122.7 billion. The improved quarterly performance lifted the nine-month PBT to N366.7 billion, representing 483.4 per cent year-on-year growth.

Its Q3 revenue also rose by 148.1 per cent to N495.8 billion, up from N199.8 billion achieved in Q3 2023. The company’s revenue rose to N1.1 trillion for the nine months with a 20 per cent rise in dividends.

Fidelity Bank posted a pre-tax profit of N81.6 billion in its third quarter operations, representing a 135.5 per cent increase compared to N34.6 billion recorded in the corresponding period of 2023.

For the nine months ending September 30, 2024, the bank’s pre-tax profit hit N281.4 billion representing 153.5 per cent growth over 2023 figures.

Net interest income for the third quarter also rose by 60.1 per cent from N87.1 billion to N139.5 billion from N87.1 billion achieved in 2023.

On market outlook, analysts said buying sentiments would continue as investors and bargain hunters react to the corporate numbers released so far.

However, they noted that the improved performance would be sustained if fiscal and monetary authorities create policies expected to give economic direction to investors, especially foreigners.

Vice President of Highcap Securities, David Adonri, said there is a need for policy changes in the economy to translate into growth in corporate fundamentals, in addition to a decline in interest rate to consolidate the performance, especially at the end of the earnings rally.

President of NewDimension Shareholders Association of Nigeria, Patrick Ajudua, described the rally as a sign of restoration of investors’ confidence in the capital market.

Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion, said discerning investors and smart traders are repositioning their portfolios along sectors and companies with the potential to release positive numbers on the strength of their earnings power at the end of Q4.

However, he pointed out the economic reforms of the government, measured by the outpouring of fiscal and monetary policies are yet to put the nation’s economy on the path of recovery.