As the stock market of the Nigerian Exchange Limited (NGX) appreciated by N1.45trillion in April, a total of 17 fundamental companies contributed about 98 percent to market capitalization in the month under review.
Analysis of trading data showed that the overall market capitalization closed at N26.761 trillion in April 2022 from N25.312 trillion in March, representing an increase of N1.45 trillion.
The 17 companies posted impressive corporate earnings in the 2021 financial year and sustained the performance in their unaudited financial statements for the first quarter ended March 31, 2022, to accumulatively gather N1.42 trillion in market capitalization in April.
The 17 companies are two listed telecommunication companies, four financial institutions, and two cement manufacturing companies.
They are; Seplat Energy Plc, Dangote Cement Plc, Lafarge Africa Plc., Zenith Bank Plc, United Bank For Africa Plc, Guaranty Trust Holding Company Plc, and Stanbic IBTC Holdings Plc
Others include; MTN Nigeria Communications Plc and Airtel Africa Plc, Nestle Nigeria Plc, Guinness Nig Plc, and Nigerian Brew. Plc, Presco Plc, Julius Berger Nig. Plc., Flour Mills Nig. Plc, Vitafoam Nig Plc, Cadbury Nigeria Plc,
Among the top market capitalization gainers in April was Airtel Africa, with a stock price gain of N125.60 or 9.96 percent to contribute N472.02billion to market capitalization. Dangote Cement appreciated by N18.90 or 6.9 percent to close trading at N292.40 per share gained N322.07billion in market capitalization.
Capital market analysts stated that Dangote Cement’s impressive earnings in Q1 2022 enhanced investors’ buying interest, stressing that the cement manufacturing company has maintained stronger fundamentals.
The company, a competitor of BUA Cement Plc and Wapco Plc, has a total Market capitalization of N4.98 trillion as of April 2022.
Dangote Cement is the second most-valued company quoted on the exchange and makes up roughly 18.6per cent of the total market capitalization of all stocks.
The Q1 2022 financial result revealed a profit of N105.85 billion, representing an 18per cent increase Y-o-Y. Dangote Cement’s revenue stood at N413.18 billion, increasing 24.20 percent from 2021.
However, Seplat petroleum, with about N270 or 29.03 percent gain in stock price, accounted for N158.88billion market capitalization and Nigerian Breweries with N134.46billion in market capitalization following N16.65 or 41.16 percent gain in stock price to N57.10.
For the banking stocks, the likes of Zenith Bank, with an N2.10 or 9.4 percent increase in stock price, gained N65.9billion in market capitalization as GTCO gained N1.60 or 7.14 percent to gain N47.09 billion in market capitalization in April 2022.
According to him, “Also, April saw the influx of Q1 2022 numbers which were impressive. We have seen Airtel Africa, Zenith Bank, UBA, and Dangote Cement reporting decent profits after tax (PAT). We saw investors scrambling to make sure they qualify for the dividends, so I think that sentiment should continue even in the new month.
“I think we might see a bit of caution on the part of investors because we are not expecting any of the major Q1 2022 earnings and so even if we see a bit of rally, it will be just a few stocks that investors are betting on do pretty well on the back of Q1 numbers especially for those that pay interim dividends.”
The chief operating officer InvestData Limited, Mr. Ambrose Omordion, noted that most listed companies are undervalued over the effect of COVID-19, stressing that local and foreign investors opted to take positions in April.
Analysts at Afrinvest Limited said, “Although we expect the positive sentiment from dividend payments to linger into early May, we think the market might begin to enter a quiet mood in the later part of the month.”
