Ahead of interim dividend and March full-year corporate earnings, position-taking across major sectors of the market, especially the telecoms pushed the All-Share index to 54,000 points while investors gained N632b in one week.
The renewed buying interests in blue chips resulted from bargain hunters taking advantage of pullbacks and panic selloffs to a position at a time when market players are also digesting the macroeconomic reports, rates hike, earnings yields and other concerns related to next year’s ongoing general election activities, which began with the primaries.
Specifically, the Nigerian Exchange Limited’s NGX All-Share Index and market capitalisation appreciated by 2.09 per cent to close the week at 54,085.3 and N29.158 trillion respectively.
However, all other indices finished lower except the NGX-Main Board index, which appreciated at 6.03 per cent, while the NGX Asem and NGX Sovereign bond indices closed flat.
Notably, the positive performance last week was buoyed by foreign investors’ renewed interest in AirtelAfri (+20.2 per cent), which proved sufficient in offsetting losses in Guinness (-11.2 per cent), Nigerian Breweries (-10.0 per cent), and MTN Nigeria (-4.8 per cent). Consequently, the MTD and YTD returns for the index increased to +9.0 per cent and +26.6 per cent, respectively.
An analyst said that the market is set for another wave on the back of bargain hunting and impressive earnings.
However, they urged investors to be more cautious and use their trade tools effectively at this point despite the market rebound.
Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion said: “We expect a mixed trend on profit-taking and reaction to an interest rate hike. Bargain hunters would also take advantage of pullbacks amid the impressive earnings and corporate actions, ahead of March year-end earnings reports, and portfolio rotations.
“Also, market players have continued to digest the macro-economic data, among other developments to support an uptrend in the new month amid the rebound in oil prices. Investors should target sound and dividend-paying stocks in the hope of dividend announcements,”
Analysts at Cordros Capital said: “With the recent decision of the MPC to hike the MPR by 150bps, we expect negative sentiments to dominate market performance in the short term.
”Nonetheless, we think a short-term market correction will present opportunities for investors to make re-entry in stocks with sound fundamentals and attractive dividend yields.
“Overall, we advise investors to take positions in only fundamentally justified stocks as the fragility of the macroeconomic environment remains a significant headwind for corporate earnings.”
Furthermore, a turnover of 1.8 billion shares worth N27.3 billion was recorded in 27,273 deals by investors on the floor of the exchange, in contrast to a total of 3 billion units valued at N31.9 billion that changed hands in 29,153 deals during the preceding week.
The financial services industry (measured by volume) led the activity chart with 1.3 billion shares valued at N10.7 billion traded in 12,379 deals; thus contributing 69.90 per cent to the total equity turnover volume.
The conglomerate industry followed with 251.105 million shares worth 1.7 billion in 1,371 deals. The consumer goods industry ranked third with a turnover of 105.6 million shares worth N2.5 billion in 4,263 deals.
Trading in the top three equities namely Ecobank Transnational Incorporation, Jaiz Bank Plc and Access Holdings Plc (measured by volume) accounted for 640.7 million shares worth N4.8 billion in 2,098 deals, contributing 34.81 per cent to the total equity turnover volume.
A total of 26,718 units of Exchange Traded Products (ETPs) valued at N2.4 million were traded this week in 26 deals compared with a total of 141,582 units valued at N3.107 million transacted last week in 17 deals.