Nigerian Stock Exchange

October 5, 2020

Stock market records new high as investors gain N299bn in one day

Stock market records new high as investors gain N299bn in one day

By Peter Egwuatu

The stock market Monday recorded a new high after five months of low activity as the benchmark index, Nigerian Stock Exchange, NSE All Share Index gained 2.1 percent to close at 27,554.56 points from 26,985.77 points on Friday.

In similar vein, another major stock market gauge, market capitalisation  up N299.0 billion to advance to N14.4trillion  from N14.105 trillion while the Year to Date, YtD return rose to 2.7 percent.

The market rally and strong recovery seen,  according to analysts are the results of increasing interests by smart money comprising foreign and domestic institutional investors, fund managers, pension fund administrators, high net worth individual, as well as retail investors.

Analysts at InvestData Limited said: “They are taking advantage of the circular flow of funds, in the midst of the low rates and yields environment to push funds into equity assets, especially blue-chips.

READ ALSO: Foreign portfolio investment in equities shrinks by 34%

There are also the strong market fundamentals such as liquidity; low valuation as represented by the prevailing attractive price earnings ratio; positive sentiment; and continued sector rotation. These are in addition to the high margin of safety among the high dividend paying stocks and many others.”

Analysis of trading on Monday showed that the sustained optimism by investors’ interest contributed to the upsurge in MTN Nigeria (3.9 percent), Airtel Africa (5.3 percent) and Zenith (5.3 percent) to boost the benchmark performance

Furthermore , activity level strengthened as volume and value traded spiked to 132.0 percent  and 158.6 percent  to 603.9million  units and N7.4 billion  respectively. The most traded stocks by volume were Zenith Bank (204.7million units), Sterling  Bank (55.2million units) and UBA (51.3million  units) while Zenith Bank (N3.8billion), Guaranty Trust  Bank (N1.1billion) and UBA (N328.8million) led by value.

The performance across sectors was impressive as all indices gained. The AFR-ICT and Banking indices gained the most, appreciating 4.5 percent and 3.4 percent respectively, following buying interest in MTN Nigeria (3.9 percent), Airtel Africa (5.3 percent) and Zenith (5.3 percent ). The Insurance and Oil & Gas indices trailed, as bargain hunting in AIICO (6.3 percent), ARDOVA (6.4 percent) and SEPLAT (2.5 percent), respectively drove a 2.0 percent and 0.8 percent gains in the indices. Likewise, the Consumer and Industrial Goods indices inched up by 0.4 percent apiece due to investors’ interest in Dangote Sugar (2.3 percent), Guinness Nigeria (7.1 percent) and WAPCO (5.6 percent).