NGX defies China’s AI disruption, gains N795 billion

Amid this global upheaval, yesterday, the Nigerian Exchange Limited (NGX) showed remarkable resilience as investors’ wealth surged by N785 billion yesterday, buoyed by renewed interest in banking stocks and anticipation of robust full-year 2024 earnings and dividend declarations by listed firms.

Global markets faced significant declines yesterday, as a sharp sell-off in AI-related stocks following China’s DeepSeek revolution in the emerging industry.

Yet, the NGX all-share index (ASI) rose by 820.65 points, representing a 0.79 per cent gain, to close at 104,418.95 points, while the overall market capitalisation climbed by N795 billion to close at N64.44 trillion.

The Nigerian market’s robust performance highlights its resilience and continued investor confidence.

United Capital Plc said: “The equities market is expected to maintain its positive momentum as investors’ position ahead of the full-year 2024 earnings season and possible corporate action declarations.

“However, the elevated interest rate environment in the fixed-income market may temper this optimism in the medium term.”

Investors’ sentiment, as measured by market breadth, closed positive as 38 stocks advanced while 30 declined. Beta Glass recorded the highest price gain of 9.98 per cent to close at N65 while RT Briscoe Nigeria followed with a gain of 9.92 per cent to close at N2.77 kobo. Access Holdings rose by 9.88 per cent to close at N27.80 kobo.

Chellarams appreciated by 9.83 per cent to close at N4.47 kobo while Skyway Aviation Handling Company rose by 9.80 per cent to close at N36.40 kobo.

On the other hand, MRS Oil Nigeria led the losers’ chart by 10 per cent to close at N180.90 kobo. Transcorp Hotels followed with a decline of 9.97 per cent to close at N114.65 kobo while Eunisell Interlinked shed 9.95 per cent to close at N11.40 kobo.

John Holt depreciated by 9.64 per cent to close at N7.50 kobo while Caverton Offshore Support Group dropped by 9.40 per cent to close at N2.12 kobo.

Meanwhile, the total volume of trade declined by 10.1 per cent to 518.276 million units, valued at N13.299 billion, and exchanged in 17,196 deals. Transactions in the shares of Access Holdings topped the activity chart with 50.992 million shares valued at N1.377 billion.

FCMB Group followed with 40.26 million shares worth N471.484 million, while Sterling Financial Holdings Company traded 38.902 million shares valued at N232.736 million.

Zenith Bank traded 33.209 million shares valued at N1.686 billion, while United Bank for Africa (UBA) transacted 29.377 million shares worth N1.094 billion.

The emergence of DeepSeek, a Chinese AI startup, which introduced a cost-effective large language model capable of rivaling offerings from U.S. tech giants, rattled the global market yesterday, with tech-heavy Nasdaq losing close to 3.5 per cent at press time.

Also, tech heavyweights such as Microsoft and Alphabet saw notable declines, as investors reassessed the high valuations of U.S. technology stocks in the face of growing competition from DeepSeek’s innovative R1 model.

European and Asian markets displayed mixed performances yesterday. While some European indices managed to end in positive territory, others experienced slight losses.

In Asia, both the Nikkei 225 and Hang Seng Index recorded declines, reflecting the cautious sentiment across global markets.

The disruption caused by DeepSeek has raised questions about the sustainability of the U.S. AI boom, prompting a shift toward safer assets, with the 10-year Treasury yield falling to 4.54 per cent.

The cryptocurrency market also buckled with bitcoin touching $98,000, the lowest since November.