The Nigerian Exchange (NGX) witnessed a surge in investor demand for financial stocks last week, with the banking and insurance sectors leading the charge. Anticipation of fourth-quarter 2024 earnings drove a buying frenzy, particularly in undervalued insurance stocks and banks signalling successful capital-raising efforts.
The Insurance Index led the momentum, gaining 7.87% week-on-week as investors capitalised on low-priced stocks amidst ongoing recapitalisation plans. Banking stocks followed suit, with the NGX Banking Index climbing 1.97% over the same period.
Prominent gainers included Fidelity Bank, Sterling Bank, and Stanbic IBTC, which saw significant demand. Fidelity Bank’s stock rose by 7.19%, Sterling Bank added 13%, and Stanbic IBTC recorded a 2.48% uptick. Other notable performers included Wema Bank (+6.47%), Jaiz Bank (+5.65%), and FCMB (+5.56%).
The positive sentiment extended to Pan-African lenders, with UBA rising by 2.37% and Zenith Bank edging up by 0.22%. In the insurance sector, Universal Insurance saw its market value jump by an impressive 25% week-on-week, while Royal Exchange followed closely with a 24.7% gain.
Overall, 63 equities appreciated in value last week, up from 60 in the previous week, while only 20 equities declined, a drop from 26 in the prior period.
This rally reflects growing investor confidence in the financial sector, buoyed by earnings expectations and strategic moves by companies to strengthen their capital base. As the year closes, analysts expect continued momentum in these segments as earnings season approaches.
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