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Persistent lull in money market lifts exchange’s index by 2.19%

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Following the continued crash in money market rates and low yields in the fixed income market, the reign of the bulls remained unabated on the equity market as the Nigerian Stock Exchange (NSE) All-Share Index (ASI) and market capitalisation appreciated by 2.19 per cent to close the week at 34,885.51 and N18.228 trillion respectively last week.

Similarly, all other indices finished higher with the exception of NSE CG, NSE Banking, NSE AFR Bank Value, NSE AFR Div Yield, NSE MERI Growth and NSE Consumer Goods.

With more maturing money market funds likely to enter the equity market, analysts at the weekend expressed optimism that the market would remain upbeat as the NSE’s year-to-date soared above the inflation rate at 29.66 per cent.

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The Chief Research Officer of Investdata Consulting Limited,Ambrose Omordion said: “However, the strong and faster recovery may continue, depending on market forces going forward, as propelled by the quality of Q3 earnings presented, especially by the tier-1 banks. This is even as analyses of numbers released so far have helped to reposition investors’ portfolios on the strength of sector and company’s performances.”

Analysts at Codros Capital Limited added: “With the recent decision of the MPC to hold monetary policy parameters constant in furtherance of their growth objective, we expect alpha-seeking investors to continue rotating their portfolio towards equities amid attractive dividend yields on bellwether stocks.

“We expect market performance to be dominated by the bulls, as positioning by early birds in dividend-paying stocks ahead of FY 2020 dividend declarations should outweigh profit-taking activities.

“We reiterate the need for positioning in only sound stocks as the weak macro environment remains a significant headwind for corporate earnings.”

Last week, trading on the equities reacted to the current recession, as the NSE reopened on a downturn on Monday, causing the market capitalisation to depreciate by N8 billion.

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The ASI shed 15.04 absolute points, representing a decline of 0.04 per cent to close at 34,121.78 points. Similarly, the overall market capitalisation value fell by N8 billion to close at N17.830 trillion.

Monday’s downtrend was driven by losses in medium and large capital stocks amongst which were; Stanbic IBTC Holdings, Lafarge Africa, Flour Mills of Nigeria, Guinness Nigeria, and Ardova Plc.

Following renewed bargain-hunting in some banking stocks, the NSE defied the current recession to close upbeat on Tuesday, causing the ASI to appreciate by 0.64 per cent.

At the close of Tuesday, the ASI rose by 218.78 points or 0.64 per cent to 34,340.56 points. Also, investors gained N113 billion in value as market capitalisation rose to N17.943 trillion.

The upturn was impacted by gains recorded in medium and large value stocks, including IBTC Holdings, United Bank for Africa (UBA), Access Bank, FBN Holdings, and UPDC Real Estate Investment Trust.

Unwilling to be weighed down by the current recession, the bull sustained a rising profile at the end of Wednesday’s transaction at the NSE, as more blue-chip stocks joined the league of gainers, causing market capitalisation to appreciate further by N224 billion.

The ASI gained 428.44 points, representing a growth of 1.25 per cent to 30,733.47 points. Also, investors gained N224 billion in value as market capitalisation rose to N18.167 trillion.

The upturn was impacted by gains recorded in medium and large capitalised stocks, including Airtel Africa, Dangote Cement, Flour Mills of Nigeria, Julius Berger, and Dangote Sugar Refinery.

Despite the decline in some banking stocks, the NSE, sustained the previous two days rally to close in upbeat on Thursday, as market capitalisation appreciated further by N18 billion.

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At the close of transactions Thursday, the ASI increased by 34.00 absolute points, representing a growth of 0.10 per cent to close at 34,803.00 points. Similarly, the market capitalisation gained N18 billion to close at N18.185 trillion.

The upturn was impacted by gains recorded in medium and large capitalised stocks, amongst which are; Mobil Nigeria, Guinness Nigeria, Guaranty Trust Bank, Cadbury Nigeria, and International Breweries.

Further analysis of last week’s performance showed that a turnover of 1.816 billion shares worth N25.791 billion was recorded in 31,665 deals by investors on the floor of the exchange, in contrast to a total of 11.400 billion shares, valued at N35.892 billion that changed hands in 39,265deals during the preceding week.

The financial services industry (measured by volume) led the activity chart with 1.274 billion shares valued at N14.710 billion traded in 18,392 deals; thus contributing 70.15 per cent to the total equity turnover volume.

The conglomerate industry followed with 217.170 million shares worth N231.809 million in 1,226 deals. The third place was the consumer goods industry, with a turnover of 113.760 million shares worth N2.598 billion in 4,568 deals.

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