After three consecutive weeks of losses, the stock market recorded five straight sessions of gains last week as renewed buying interest in blue chips lifted the all-share index by 1.7 per cent to 99,300.38 points.
Investors’ interests in Seplat (+13.7 per cent), FBNH (+14.7 per cent), UBA (+15.6 per cent), Dangote Sugar Refinery (+20.5 per cent), Zenith Bank (+10 per cent) and GTCO (+7.2 per cent) spurred the weekly gain.
As a result, the month-to-date and year-to-date returns for the index increased to +1.1 per cent and +32.8 per cent, respectively.
On the sectoral index, the NGX oil and gas rose by 9.08 per cent, driven by gains in Seplat, Oando, Eterna and Conoil. The NGX Banking sector followed with 8.72 per cent, spurred by increased investor interest in Fidelity, FCMB, UBA and FBNH.
The NGX Insurance sector gained 3.88 per cent bolstered by increased activities in CHI Plc, International Energy Insurance, Mansard and NEM.
The consumer goods sector also advanced by 2.04 per cent, with contributions from Dangote Sugar Refinery, NASCON, Nigerian Breweries and Transnational Corporation of Nigeria (Transcorp).
However, the industrial goods sector recorded a slight loss of 0.13 per cent due to declines in UHomes Reit, CI Leasing and Lafarge WAPCO.
On the activity chart, a turnover of 2.2 billion shares worth N31.3 billion was recorded in 39,362 deals was traded by investors on the floor of the exchange, up from a total of 1.98 billion units valued at N40.7 billion that changed hands in 38,487 deals on May 24, 2024.
The financial services industry (measured by volume) led the activity chart with 1.9 billion shares valued at N23.9 billion traded in 21,717 deals; thus contributing 87.4 per cent to the total equity turnover volume.
The oil and gas industry followed with 55.3 million units worth N3 billion in 2,109 deals. The third place was the agriculture industry, with a turnover of 45 million shares worth N377.6 million in 1,615 deals.
Trading in the top three equities namely Abbey Mortgage Bank Plc, Access Holdings Plc and Zenith Bank Plc (measured by volume) accounted for 1.1 billion shares worth N14.9 billion in 6,494 deals, contributing 51.6 per cent to the total equity turnover volume.
Analysts predict a brighter outlook for equities, citing investors repositioning for interim dividend payout ahead of the half-year result.
Analysts at Vetiva Dealings and Brokerage said: “Given the strong buy-side reaction we saw in the market this week, we expect to see a reversal in sentiment next week, as investors seek to lock in gains recorded this week. That said, we expect the market to trade lower in Monday’s session.”
Cordros Capital said: “While we still expect overall market sentiment to border on the bearish side, we believe investors will continue to cherry-pick attractive stocks, particularly at current market valuations. Overall, we believe developments in the macroeconomic landscape and corporate actions will shape the direction of the local bourse in the near term.”
Cowry Research said: “Looking ahead, the current bullish trend is expected to persist, driven by profit-taking and portfolio rebalancing as the new trading month approaches. Market pullbacks are anticipated to enhance the index’s upward potential, supported by the ongoing dividend earnings season. However, we continue to advise investors to trade on companies’ stocks with sound fundamentals.”
Meanwhile, the total turnover in the FX spot and derivatives markets for the week ending May 31, 2024, was $1.82 billion, representing an increase of 25.2 per cent ($366.7 million) from $1.45 billion reported for the week ending May 24, 2024.
According to FMDQ Securities Exchange, the week-on-week (WoW) increase in total turnover was largely driven by the 25.8 per cent ($370 million) increase in FX Spot turnover, which recorded a total value of $1,803 million, compared with the $1,433 million total transactions value recorded in the week-ended May 24, 2024.
The exchange noted that the Week-on-Week (WoW) decrease in FX derivatives turnover was solely driven by the 16.5 per cent ($3.3 million) decrease in FX Forwards turnover, whilst there was a continued lack of activity in both the Exchange-Traded FX Futures and Cleared Naira-Settled Non-Deliverable Forwards (Cleared USD/NGN NDFs) markets.
Also, within the period, the average Nigerian Autonomous Foreign Exchange Fixing (NAFEX) was $/₦1,412.03, compared to $/₦1,479.8 recorded in the week-ended May 24, 2024.
