ICT index rises by 3.6% amid gains by telcos

The ICT index led gainers’ chart at the end of last week’s transactions on the equities sector of the Nigerian Exchange Limited (NGX) with 3.6 per cent, propelled by price appreciation in Airtel Africa (+4.9 per cent) and MTN Nigeria (+2.0 per cent).

Following the sector last week was the banking index, adding 3.4 per cent. The upturn was occasioned by gains in Fidelity Bank (+11.1 per cent) and Sterling Bank (+7.7 per cent). The Insurance and Industrial goods indices trailed with 1.7 per cent and 0.3 per cent.

Consequently, the All-Share Index recorded w/w gain of 2.3 per cent to close at 74,023.27 points – crossing the 74,000 mark for the first time while market capitalisation rose by ₦894.1 billion to ₦40.5 trillion, causing the year-to-date (YTD) returns to hit 44.4 per cent.

On what will shape the market in the next trading session, analysts at Vetiva Dealings and Brokerage said: “It was another positive weekly close in the market, with the banking index closing as the best performer (+335bps w/w). While we still anticipate some profit-taking next week, we expect the market to sustain its bullish momentum.”

Chief Research Officer of Investdata Consulting, Ambrose Omordion said: “Cautious trading and mixed outlook continued in the fixed income market, as midweek’s OMO auction rates remain relatively low in the face of high inflation and negative real returns to make the equity space attractive and funds flowing in that direction at the close of the day trading on the NGX.

“Also, Institutional players are holding their position in stocks and gradually increasing and accumulating positions ahead of year-end. Such a situation has relatively supported this ongoing uptrend on NGX.

“Already, the Q3 corporate earnings of listed companies, especially the services providers have signaled the possibility of high dividend payment, as investors seek to hedge against the raging hyperinflation.
“We expect positive sentiments and profit-taking to continue on bargain hunting for dividend-paying stocks ahead of the Christmas holidays. Meanwhile, all eyes are on the fiscal and monetary authorities to give direction of the government reforms and policies so far,” he said.

Further breakdown of last week’s transactions showed that a turnover of 2.5 billion shares worth N53.8 billion was recorded in 35,848 deals by investors on the floor of the exchange, in contrast to a total of 1.9 billion units valued at N31.6 billion that was exchanged hands last week in 33,020 deals.

The financial services industry (measured by volume) led the activity chart with 1.8 billion shares valued at N24.6 billion traded in 17,589 deals; thus contributing 70.9 per cent to the total equity turnover.

The conglomerate sector followed with 222.9 million shares worth N1.8 billion in 2,573 deals. The third place was the services industry, with a turnover of 93.8 million shares worth N528.5 million in 2,166 deals.

Trading in the top three equities namely Abbey Mortgage Bank Plc, Transnational Corporation Plc and Access Holdings Plc (measured by volume) accounted for 621.8 million shares worth N6.3 billion in 4,235 deals, contributing 25.1 per cent to the total equity turnover volume and value respectively.

Meanwhile, in the FX Spot and Derivatives markets, a total turnover for the week ended December 22, 2023, was $798.89 million, representing an increase of 41.02 per cent ($232.38 million) from $566.51 million reported for the week-ended December 15, 2023.

According to FMDQ Securities Exchange, the Week-on-Week (WoW) increase in total turnover was jointly driven by the 37.9 per cent ($213.56 million) and 586.2 per cent ($18.82 million) increases in FX spot and FX derivatives turnover, respectively.

According to the exchange, the WoW increase in FX derivatives turnover was solely driven by the 586.2 per cent ($18.82 million) increase in FX Forwards turnover, whilst there were no trades executed in both Exchange-Traded FX Futures and Cleared Naira-Settled Non-Deliverable Forwards (Cleared USD/NGN NDFs) markets.

In the FX Spot market, the total value of transactions for the week ended December 22, 2023, was $776.9 million, representing an increase of 37.9 per cent ($213.56 million) from the value of transactions executed in the week ended December 15, 2023 ($563.30 million).

Also, during the period, the average Nigerian Autonomous Foreign Exchange Fixing (NAFEX) rate was $/₦893.51, compared to $/₦896.03 recorded in the week ended December 15, 2023, representing an appreciation of the Naira against the dollar by 0.28 per cent ($/₦2.52).