Three financial stocks contribute 21.2% to market turnover

Three bank stocks – United Bank for Africa Plc (UBA), Universal Insurance Plc and Zenith Bank Plc – dominated activities in the financial service sector of the Nigerian stock market last week, contributing 21.2 per cent to activities.

With the contribution, the financial sector maintained its dominance in volume terms with 881.6 million shares valued at N17.7 billion traded in 14, 968 deals.

Despite the three-day public holiday last week, the local bourse closed in an upbeat mood last week. The market opened for three trading days last week, as the Federal government declared Wednesday, December 25 and Thursday, December 26, 2024, as public holidays to commemorate the Christmas celebration.

Last week, the top three banks (measured by volume) accounted for 294 million shares worth N8.1 billion in 3,834 deals, contributing 21.2 per cent to the total equities’ turnover.

Following the banking sector in volume terms last week, was the oil and gas industry followed with 103.8 million shares worth N12.4 billion in 4,554 deals. The services industry ranked third with a turnover of 98.6 million shares worth N482 million in 1,998 deals.

Overall, a total turnover of 1.4 billion shares worth N52 billion in 33,411 deals was traded this week by investors on the floor of the Exchange, in contrast to a total of 2.5 billion shares valued at N91.3 billion that exchanged hands last week in 51,406 deals.

Sectoral performance remained predominantly positive, with four of the five major indices closing in the green. The NGX Insurance Index led the charge, surging by 7.87 per cent week-on-week due to strong buy-side interest in counters such as Universal Insurance, Royalex, Prestige Assurance and Sunu Assurance.

The NGX-consumer goods index followed closely, advancing by 3.13 per cent, driven by bullish sentiment around PZ Cussons and Ikeja Hotel. The NGX-Banking and NGX-industrial goods indices also posted gains of 1.97 per cent and 0.09 per cent, respectively, buoyed by demand for stocks like Fidelity Bank, Sterling Bank, May& Baker, Cutix and Stanbic IBTC.

Conversely, the NGX oil and gas index recorded a marginal decline of 0.12 per cent, largely due to profit-taking activities in Aradel, Eterna and Oando.
Consequently, the NGX All-Share index and market capitalisation appreciated by 0.99 per cent to close the week at 102,133.3 and N61.912 trillion respectively.

On the price movement chart, 64 equities appreciated during the week, higher than 61 equities in the previous week. Also, 20 equities depreciated lower than 26 in the previous week, while 69 equities remained unchanged, higher than 66 recorded in the previous week.

Analysts attributed the consistent growth in market indicators to the increasing appeal of Nigerian equities, which have garnered strong interest from investors despite the positive performance of fixed-income and money markets.

This development comes against the backdrop of the Central Bank of Nigeria’s (CBN) tightened monetary policy, which saw interest rates rise by over 800 basis points in 2024.

Even with these headwinds, the local equities market has continued to demonstrate resilience and attracted sustained investor confidence. On market outlook, analysts at Cowry Asset Management Limited said: “Looking ahead, the Nigerian equities market is expected to maintain its upward trajectory as investors continue to position themselves in fundamentally strong stocks with significant growth potential.

“Year-end window-dressing activities and preparations for the new trading year are anticipated to provide additional support to market momentum. With favourable market internals and attractive valuations, the domestic equities market appears well-positioned for further growth in the coming weeks.”
Vetiva Dealings and Brokerage said: “We anticipate another round of mixed activity in the market on Monday, as new trading comes on the horizon. We also expect investors to begin taking their final end-of-year position, ahead of the last trading session of the year.”