Stock Market Skyrockets by N894 Billion with Major Indicator Reaching Record High
The performance of the stock market last week saw a significant increase of N894 billion, resulting in the major market indicator reaching an all-time high of 74,000 basis points. The Nigerian Exchange Limited All-Share Index (NGX ASI) experienced a rise of 2.26 per cent week-over-week, closing at 74,023.27 basis points and maintaining a positive momentum in 2023. As a result of this surge, the market capitalization increased by N894 billion, reaching N40.507 trillion by the end of the week.
The positive performance was observed across various sectors, with the NGX Banking index recording a weekly gain of 3.4 per cent and the NGX Insurance index rising by 1.7 per cent week-over-week. Additionally, the NGX Industrial Goods index saw a 0.3 per cent increase, while the NGX Oil & Gas index experienced a 0.1 per cent uptick. However, the NGX Consumer Goods index closed the week with a 0.7 per cent decrease.
Throughout the week, the market breadth remained positive as 55 equities appreciated in price, 35 equities depreciated in price, and 65 equities remained unchanged. Infinity Trust Mortgage Bank led the gainers table with a 60.64 per cent increase, followed by DAAR Communications and Multiverse Mining and Exploration, which saw gains of 50 per cent and 41.25 per cent, respectively.
On the other hand, Associated Bus Company, Omatek Ventures, and e-Tranzact International led the decliners table with decreases of 16.48 per cent, 12.33 per cent, and 12.32 per cent, respectively.
Investors traded a total turnover of 2.474 billion shares worth N53.787 billion in 35,848 deals on the floor of the Exchange, marking a significant increase compared to the previous week and indicating heightened market activity.
The Financial Services Industry dominated the activity chart, accounting for 70.95 per cent of the total equity turnover volume and 45.81 per cent of the value. Following this, the Conglomerates Industry and the Services Industry also contributed to the significant trading activity.
Analysts have projected positive sentiment to persist in the final trading week of the year as investors focus on fundamentally sound stocks and engage in year-end portfolio rebalancing activities.
The current bullish sentiment in the stock market is attributed to heightened demand for financial services and blue-chip stocks. This has created an environment conducive to the ongoing Santa Claus rally as the festive season approaches. The robust interest in high-priced equities has propelled the NGX All-Share index, leading to substantial traded volumes and a positive market breadth. This bullish sentiment is further heightened by the ongoing portfolio rebalancing ahead of the anticipated 2024 earnings reporting and dividend season.
As the year draws to a close, analysts expect the positive sentiment to be sustained, supported by year-end portfolio rebalancing exercises. Investors are anticipated to engage in profit-taking and bargain hunting for dividend-paying stocks, driven by sector rotation and portfolio rebalancing. The market sentiment is expected to remain buoyed by high expectations for robust full-year corporate financial results and the attractiveness of high yields, especially in a low-interest-rate environment.
In conclusion, it is advisable for investors to consider positions in stocks with sound fundamentals, higher earnings yield, and earnings per share to support a higher payout ratio. This strategic approach will help investors optimize their risk-return profiles and capitalize on emerging opportunities in the stock market.
