Investors in the nation’s stock market have recouped the N326bn losses recorded in January by gaining N806bn in 15 days. The equities market plunged to its lowest level in more than one and a half years on January 9 as the market capitalisation of equities listed on the Nigerian Stock Exchange fell below the N11tn mark from N11.72tn on December 31, 2018.
This month, investors have seen the longest gaining streak of the market since July 2017 as they stepped up their bets on a market-pleasing outcome. The market capitalisation, which stood at N11.384tn on January 31, hit the N12tn mark on February 12, and increased further to N12.2tn at the end of trading on Friday.
Analysts at Meristem Securities Limited said the stock market had seen a mass re-entry of investors ahead of the 2019 elections. According to them, the market’s gaining streak in recent days improved the confidence of investors, luring them back to the market.
They said, “The bourse sustained its rally from the previous week, which we believe has been on the back of mass re-entry into the market with investors locking positions ahead of the general elections and the relatively low prices many of the counters have been trading at.”
The equities market, in continuation of its bullish run, gained in four of the five sessions last week, closing 376 basis points up week-on-week as the All Share Index advanced by 3.76 per cent to 32,715.20bps, taking the year-to-date return to +4.09 per cent.
The volume and value of transactions also improved by 49.68 per cent and 4.66 per cent, respectively, settling the market breadth at 2.76x, with 58 gainers and 21 losers.
The oil and gas and consumer goods sectors were the main drivers of the positive market performance, gaining 594bps and 541bps, respectively week-on-week, driven by advances in Oando Plc, Seplat Petroleum Development Company Plc, 11 Plc, Unilever Nigeria Plc, Cadbury Nigeria Plc and Nigerian Breweries Plc.
The industrial goods sector was the third largest gainer, advancing by 162bps week-on-week despite a 104bps loss on Friday after gains in Dangote Cement Plc and Lafarge Africa Plc outweighed a loss in Cement Company of Northern Nigeria Plc.
The banking sector recorded the smallest gains, up by 159bps week-on-week after gains in Union Bank Nigeria Plc, Ecobank Transnational Incorporated, United Bank for Africa Plc and Zenith Bank Plc outweighed losses in Guaranty Trust Bank Plc and Access Bank Plc.