The Nigerian equity market maintained its upward trajectory on Monday, witnessing a substantial gain of N673 billion, signaling sustained bullish sentiment among investors. Both the market capitalization of the exchange and the All-Share Index experienced a notable increase of 1.30%, settling at N52.408 trillion and 95,768.12 basis points, respectively, at the close of trading.
Despite the positive market performance, there was a dip in overall market participation, with a 14.52% decrease in the volume of traded units and a 4.23% decline in the value, reaching 721,813,844 units and N14.407 billion, respectively.
Market sentiment, however, leaned towards the negative side, evident in 47 stocks recording losses compared to 24 gainers during the trading session.
Earlier projections from Cowry Assets analysts for a potential short-term pullback were based on the ongoing movement pattern of the All-Share Index, suggesting a persistent overbought condition in the market. Managing Director/Chief Executive Officer of Kapital Care Securities Ltd, Andrew Tsaku, dismissed these projections, considering them as routine occurrences in the market.
Tsaku expressed optimism about the growing interest in the market beyond initial expectations, leading to a surge in the prices of fundamentally sound stocks. He observed a positive impact on both well-regarded and less-favored stocks alike, describing it as a “bandwagon effect.”
He commented, “For the first time in a long time, our listed stocks are having a better and more realistic reflection of their intrinsic values. I remain unperturbed with the current posture of the market and would rather relish it because I expect the market to still grow towards an index of 100,000 before there may be a ‘normalization’.”
Tsaku acknowledged that fundamentally sound stocks are likely to maintain their strength, but cautioned that those following trends may face challenges when the market dynamics shift. Despite the positive outlook, he emphasized the importance of vigilance in a rising market, noting that being caught off guard is a risk investors should avoid.
