Market capitalisation edges up by 0.8%

The positive reaction to the latest inflation data, which moderated for the second consecutive month to 32.15 per cent in August 2024, has triggered renewed bargain hunting in many blue-chip stocks, causing the All-share index and market capitalisation to appreciate by 0.8 to close the week at 98,247.99 and N56.457 trillion respectively.
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Despite the public holiday declared on Monday, September 16, to commemorate the 2024 Eid el Maulud celebration, the stock market closed the week in an upbeat mood as investors jostled for stocks with good fundamentals in anticipation of more improvement in economic indices.

At the close of transactions last week, a turnover of 1.9 billion shares worth N38.4 billion was recorded in 40,228 deals by investors on the floor of the exchange, in contrast to a total of 2.6 billion units, valued at N5m1.2 billion that was exchanged in 50,615 deals during the preceding week.

The financial services industry (measured by volume) led the activity chart with 820.8 million shares valued at N16 billion traded in 16,627 deals, thus contributing 44 per cent to the total equity turnover volume.

The oil and gas industry followed with 443.7 million shares worth N5 billion in 5,319 deals. The third place was the conglomerates industry, with a turnover of 183.7 million shares worth N2.9 billion in 2,510 deals.

Trading in the top three equities namely Japaul Gold & Ventures Plc, FBN Holdings Plc and UACN Plc (measured by volume) accounted for 728 million shares worth N10 billion in 4,374 deals, contributing 39.1 per cent to the total equity turnover volume. Analysts at Cowry Asset Management said with the market displaying resilience amid positive macro signals, there is heightened anticipation of bullish sentiment in the coming week, driven by portfolio rebalancing and strategic positioning in value-driven stocks.

Cordros Capital said: “In the coming week, we expect investors to closely monitor the upcoming MPC meeting, NTB and bond auctions for insights on the direction of yields in the fixed-income market and the potential impact on the equities market. As a result, we anticipate cautious trading.”

Chief Research Officer of Investdata Consulting, Ambrose Omordion said the current state of the NGX presents an opportunity to buy into undervalued and fairly valued companies as revealed by their half-year corporate numbers and price-to-earnings ratios.

However, he expressed worry that the reforms of the government, through fiscal and monetary policy authority are yet to put the economy on the path of sustainable growth.

It stated: “There are also issues with the implementation style amid the oscillating oil production output even as the Naira continues to depreciate at a time that oil is trading below $75 per barrel at the international market.

“We expect mixed sentiment to continue as players reposition their portfolios ahead of quarter 2 and Q3 earnings session amid profit taking and bargain hunting in the hope of an inflow of the half-year numbers from the other interim dividend-paying stocks.

“Portfolio repositioning is continuing, with investors taking advantage of pullbacks to buy into value. Consequently, investors should take advantage of price correction and also look at the trends and events across the globe and domestically.”