The Nigerian Exchange Limited (NGX) stock market segment closed positive last week, gaining N624 billion in market capitalisation as the country braces for the 2023 general elections.
As a result, the NGX All-Share Index gained 2.13 percent weekly (W-o-W) to close at 54,949.21 basis points.
In addition, market capitalisation increased by N624 billion to N29.934 trillion at the end of the week.
Last week’s performance across sectors was largely positive, with most indices benefiting from increased inflows of funds into the equity space and continued buying sentiments, except for the insurance index, which ended the week in a quiet mode.
Meanwhile, the NGX Consumer Goods index saw positive price movement, rising 6.30 percent. The NGX Oil & Gas index gained 2.73 percent, the NGX Banking index gained 2.21 percent, and the NGX Industrial Goods index gained 0.34 percent during the week as investors positioned themselves for the early filers in these sectors to begin hitting the market with their 2022 full-year financial statements.
The market breadth for the week was positive, with 39 stocks rising in price, 22 falling in price, and 96 remaining unchanged. MRS Oil Nigeria led the gainers’ table with a 32.83 percent gain to N30.55 per share.
Tripple Gee and Company gained 31.66 percent to close at N2.62 per share, while John Holt gained 32.33 percent to close at N1.76.
Capital Hotel, on the other hand, led the decliners table by 9.42 percent, closing at N2.50 per share. Vitafoam Nigeria trailed with a 7.18 percent drop to N19.40, while Neimeth International Pharmaceuticals fell 6.45 percent to N1.45, per share.
Last week, investors on the floor of the Exchange traded 799.848 million shares worth N29.354 billion in 14,194 transactions, compared to 751.990 million shares worth N20.575 billion traded in 15,822 transactions the previous week.
Despite the positive investor sentiment, analysts predict cautious trading this week as post-election developments unfold.
The NGX remains upbeat during Nigeria’s election season in 2023, signalling a complete shift in patterns in the country’s stock market’s history. Positive sentiment and buying interest were observed across all classes of stocks with a history of dividend payment, supporting the uptrend.
As stock market investors digest the latest macroeconomic data on Nigeria’s economic performance in 2022 and the lingering cash crunch in the economy, the domestic bourse trades at a 16-year high at the end of the week and ahead of the Saturday presidential and governorship elections, breaking out the recent resistance levels of 54, 290.84 basis points on buying pressure amid the uptick in fixed income market rates and yields.
“We believe investors will be focused on the outcome of the highly anticipated 2023 Presidential elections,” said Cordros Securities Limited. As a result, we are seeing more of a ‘choppy theme’ as cautious trading dominates trading activities.
Overall, we advise investors to seek trading opportunities in only fundamentally sound stocks as the weak macro story remains a significant headwind for corporate earnings.
Going into the new week, analysts at Cowry Assets Management Limited expected mixed and positive sentiments to continue as market players digest the Q4 GDP figure of 3.52 percent even as the results from the presidential and national assembly elections begin to fall in.
Also, the recent uptick in rates seen in the fixed income market at the end of the last treasury bills auction in the midst of corporate earnings expectation, portfolio rebalancing and elections jittery are expected to drive sentiments in the market.
However, we advise investors to trade companies with sound fundamentals and, as such, should take advantage of price corrections in line with domestic and global trends, they said.
