By Nkiruka Nnorom
The equities market closed the month of April on a roller coaster with investors recording N1.45 trillion gains driven by renewed interest that followed the release of impressive first quarter (Q1) 2022 earnings reports and rise in the prices of crude oil in the international market.
The stock market rebounded from its previous loss position in March and had maintained the positive trajectory throughout last month as investors’ position for the release of Q1’22 financial results.
Recall that crude oil trades above $100 dollars per barrel as at the end of April and is projected to average $100 per barrel this year.
Specifically, the Nigerian Exchange Limited (NGX) All Share Index (ASI) rose to 49,638.94 points from 46,965.48 points at the beginning of the month, representing a 5.7 per cent increase.
Similarly, the market capitalisation of all listed equities rose by the same margin, appreciating to N26.761 trillion from N25.312 trillion at the beginning of the month.
Further analysis of the trading statistics for the month showed that activities were positive across the sectors as all the five sectors recorded appreciable increase.
The oil and gas sector led, rising by 19.06 per cent, followed by the consumer goods sector which advanced by 11.54 per cent.
Commenting on the development, Mr. David Adonri, Vice Chairman, Highcap Securities, said: “The 5.7 per cent gain in equities in April 2022 is based on reaction of market to rising crude oil price and the generally impressive first quarter results released so far.
“If crude oil price remains above $100 per barrel in the remaining period of Q2 and if more Q1 results are impressive, the market can gain further points.”
Expressing similar optimism, analysts at Cordros Capital said: “This week, we expect investors to continue to rotate their portfolios towards cyclical stocks that delivered decent earnings last week. “Thus, we see scope for the bulls to maintain dominance, albeit the magnitude of the gains will be substantially lower, as profit takers are likely to cash out on the gains across bellwether stocks.”
Meanwhile, they reiterated the need for positioning in only fundamentally sound stocks, arguing that weak macro environment remained a significant headwind for corporate earnings.