Market gains N95b as cautious trading dominates activities

Uncertainty surrounding the outcome of the rebased Consumer Price Index (CPI) report and the pivot of monetary policy intervention triggered sell-offs across multiple sectors and cautious trading on the Nigerian Exchange Limited (NGX) last week.

The all-share index (ASI) edged up by 0.4 per cent, from 107,937.74 to 108,497.4 and market capitalisation added N95 billion to close at 67,614 trillion. The gains were marginal compared to the 1.4 per cent week-on-week increase and N883.5 billion market cap boost recorded in the previous week, reflecting an 89 per cent decline in market gains.

The market slowdown stemmed from investors adopting a wait-and-see approach, assessing the potential impact of macroeconomic developments on portfolio positioning.

Despite the index’s positive movement, trading activity remained weak. Market sentiment was largely negative, with total weekly traded volume dropping 17.1 per cent to two billion units across 70,853 deals. The total trade value also declined by 10.9 per cent to N49.89 billion, underscoring reduced participation.
Performance across key sectors was mixed, with three indices closing in the green and three in the red. The NGX Consumer Goods Index led gainers, surging 6.6 per cent week-on-week, followed by the NGX Insurance Index (+1.47 per cent) and the NGX Industrial Index (+0.05 per cent).

Gains in BUA Foods (+11.9 per cent) and Dangote sugar (+15 per cent) drove the ASI with month-to-date and year-to-date returns rising to +3.8 per cent and +5.4 per cent, respectively.

A total of two billion shares valued at N49.5 billion were traded during the week, a decline from the 2.4 billion shares worth N55.512 billion exchanged during the preceding week.

Financial services industry-led activity, accounting for 1.199 billion shares valued at N26.3 billion across 30,527 deals, contributing 59.9 per cent of total volume and 53.2 per cent of total value.

The agriculture sector followed with 234.002 million shares worth N1.7 billion in 3,191 deals. Consumer Goods Industry ranked third, with 173.8 million shares valued at N7.2 billion in 8,903 deals.

The top three equities by volume — Access Holdings Plc, Ellah Lakes Plc and Fidelity Bank Plc, accounted for 618.543 million shares worth N11.207 billion in 7,159 deals, contributing 30.9 per cent of total equity turnover.

Looking ahead, analysts at Cowry Asset Management Limited anticipate mixed market sentiment as investors digest corporate earnings releases and dividend announcements.

It added that investors would keep an eye on the rebased CPI data and the CBN’s rate pause, with potential fund inflows into equities as investors seek better opportunities. However, they advise caution, urging investors to focus on fundamentally strong stocks.

Cordros Capital projects that market performance will be influenced by the upcoming Q4 2024 GDP report and further corporate earnings releases, with Dangote Cement, WAPCO and BUA Cement expected to unveil their 2024 audited financials this week.

According to the analysts, investor sentiment will likely be shaped by macroeconomic trends and movements in the fixed-income market in the medium term.