By Ken Afor
In spite of the profit-taking activities observed during the mid-week trading session last week, the stock market concluded on a positive note, as investors walked away with a remarkable gain of N1.85 trillion from their investments.
The market capitalization, which signifies the overall value of investments in the Nigerian Exchange Limited (NGX), witnessed a surge to N45.442 trillion on Friday, surpassing the previous week’s figure of N43.593 trillion.
Analysts have highlighted the ongoing portfolio rebalancing on the Exchange as we approach the unaudited fourth quarter 2023, Q4’23 results, along with the upcoming earnings and dividend season. This activity is expected to continue as more companies, including BUA Foods and others, have informed the NGX and investors about their board meetings and closed period for the 2023 full-year financials. These announcements come amidst the effects of January and other factors related to the challenging economic conditions.
Moreover, the NGX All Share Index, ASI, witnessed a significant increase, rising from 79,664.66 points to 83,042.96 points compared to the previous week. This translates to a 4.2% Week on Week, W/W gain, while the Year-to-Date, YtD gain reached an impressive +11.1%.
In the meantime, an analysis of market activities revealed that BUA Foods experienced a surge in its share price by 15.5%, while Dangote Cement saw a 7.7% increase. TRANSCORP witnessed a significant rise of 17.9%, and Guaranty Trust Holding Company (GTCO) observed an 8.9% growth.
Regarding sectoral performance, the Consumer Goods Index demonstrated a notable growth of 9.6%. The Insurance Index also experienced a positive trend with a 7.6% increase. The Banking Index showed a moderate growth of 5.1%, while the Industrial Goods Index witnessed a slight rise of 4.8%. However, the Oil and Gas Index faced a decline of 1.6%.
“In the short term, we expect market performance to be dominated by the bulls, as positioning for 2023 full year earnings releases and accompanying dividends declarations should outweigh profit-taking activities. Notwithstanding, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings,” according to analysts at Cordros Research.
Commenting as well, analysts from InvestData Consulting stated: “We expect mixed sentiment and profit taking to continue, this week as bargain hunters and ongoing portfolio persist ahead of unaudited Q4 2023 numbers and volatility in the face of expected December Consumer Price Index, CPI and coming Monetary Policy Committee, MPC meeting. A pullback at this point will add more strength to upside potential. As such, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.”
