Investors in the Nigerian stock market experienced substantial gains totaling N1.67 trillion amid a powerful rally toward the close of the year, driven by widespread enthusiasm in various sectors on the Nigerian Exchange (NGX).
Market experts observed that a strong willingness to take on risk prevailed in the Nigerian stock arena, as extensive purchasing activity spread through prominent blue-chip companies, major corporations, and those with solid underlying fundamentals in anticipation of the festive season.
The typical seasonal boost at year’s end, along with portfolio enhancement efforts, played a significant role, according to a report from Cowry Asset Management Limited, bolstering optimistic outlooks and elevating numerous stocks to new peaks over the past 52 weeks.
The primary gauge, known as the All-Share Index, advanced by 1.76% over the week, concluding at 152,057.38 points, prolonging the upward momentum at year’s end and highlighting ongoing trust in banking and consumer-oriented equities.
As market participants eagerly built up their holdings, the cumulative returns for the year improved to 47.73%, as detailed in various broker analyses.
The overall value of the NGX, or market capitalization, echoed this upward trend, increasing by 1.76% to reach N96.94 trillion, inching nearer to the notable milestone of N100 trillion.
Thanks to heightened risk engagement, the worth of equity holders’ investments climbed by N1.67 trillion within a single week. Trading volumes shifted dramatically toward positivity, indicating revived involvement and widespread optimism.
Analysts in the field pointed out that this was plainly shown in the market’s overall direction, which ended at a robust 1.57x ratio, featuring 55 stocks that rose compared to 35 that fell. The volume of shares traded weekly skyrocketed by 125.2% to 9.85 billion shares, and the total value of transactions leaped by 212.6% to N305.89 billion.
These transactions occurred in 126,637 separate deals, as noted by Cowry Asset Limited, emphasizing a clear resurgence in aggressive trading and enhanced market fluidity.
Performance across sectors was predominantly upward, with five out of the six monitored areas ending on a high note. The consumer products category spearheaded the gains with a 2.75% increase, propelled by impressive showings from GUINNESS and CHAMPION BREWERIES.
The financial services sector was right behind, up by 2.73%, as traders ramped up stakes in reliable entities like FIRSTHOLDCO and AFRIPRUD. The manufacturing sector also posted notable progress, rising 1.09% thanks to demand for BUA CEMENT and BERGER.
Both the insurance and commodity benchmarks saw modest upticks of 0.96% and 0.34%, respectively, aided by targeted investments in OKOMU OIL, SUNU ASSURANCES, and SOVEREIGN TRUST INSURANCE.
The only sector to decline was oil and gas, which slipped slightly by 0.17% due to limited selling in JAPAUL GOLD and ETERNA.
In terms of standout performers, ALUMINIUM EXTRUSION COMPANY (ALEX) led the pack with an impressive 59.4% rise over the week, trailed by MECURE at 44.9%, FIRSTHOLDCO at 42.9%, GUINNESS at 33.0%, and NPF Microfinance Bank at 20.6%.
On the flip side, LIVESTOCK FEEDS, JAPAUL GOLD, INTERNATIONAL ENERGY INSURANCE, FTN COCOA, and STANBIC IBTC experienced drops of 11.4%, 10.5%, 9.9%, 9.8%, and 9.3%, respectively, as certain traders secured gains or adjusted their asset allocations.
From a technical perspective, Cowry Asset Limited indicated that the market continues to exhibit a strong upward trajectory, maintaining a sequence of escalating peaks and troughs.
That said, the company highlighted that indicators of momentum for some actively traded securities are starting to indicate potential overstretching, hinting at brief periods of stabilization or minor retreats.
“These interruptions are considered beneficial in the larger positive framework and are expected to offer new opportunities for those with a mid-term horizon.
“As we approach the holiday period, the overall mood in the market is anticipated to stay favorable, albeit more discerning.
“Shifts between sectors are likely to continue, with attention directed toward companies boasting sturdy basics, fair pricing, and transparent profit prospects.
“Although some selling for profits could limit rapid increases, any dips in prices are poised to draw in value seekers, preserving the general upward inclination. In the meantime, our recommendation remains for traders to invest in companies with strong fundamentals,” the advisory firm concluded.
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