Stock Market Up 0.17%, Ends First Week in December Positive

Kayode Tokede

The first full trading week of December 2023 ended on a positive note last Friday, with investors and fund managers engaging in year-end seasonality activities and strategic portfolio rebalancing.

Consequently, the equities market gained 0.17 per cent, driven by increased investors’ demand for Access Holdings, Ecobank Transnational Incorporated (ETI) and FBN Holdings Plc.

The benchmark index closed northward by 0.17 per cent week-on-week (W-o-W) to close at 71,541.74 basis points. Similarly, investors’ value appreciated N67 billion as market capitalisation rose to N39.149 trillion.

Despite the overall mildly positive market performance, sectoral dynamics revealed a mixed bag. The NGX Industrial, NGX Insurance, and NGX Oil & Gas indices faced minor setbacks, witnessing weekly declines of 3.03 per cent, 1.44 per cent, and 0.58 per cent, respectively.

Conversely, the NGX Banking index and NGX Consumer Goods index recorded gains of 6.08 per cent and 0.21 per cent, respectively.

Market breadth for the week was positive as 49 stocks appreciated in price, 33 depreciated in price, while 73 equities remained unchanged.

Multiverse Mining and Exploration led the gainers table by 57.02 per cent to close at N9.39, per share. Thomas Wyatt Nigeria followed with a gain of 32.80 per cent to close at N3.32, while Infinity Trust Mortgage Bank went up by 32.09 per cent to close to N1.77, per share.

On the other side, Consolidated Hallmark Holdings led the decliners table by 12.70 per cent to close at N1.10, per share. Oando followed with a loss of 12.29 per cent to close at N10.35, while Abbey Mortgage Bank declined by 10.47 per cent to close at N1.54, per share.

Overall, a total turnover of 2.423 billion shares worth N45.070 billion in 34,704 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 2.543 billion shares valued at N38.644 billion that exchanged hands prior week in 36,138 deals.

On the market performance this week, aanalysts have predicted mixed trading amid festive season.

The stock market has demonstrated resilience despite instances of profit-taking. As the year gradually winds down, paving the way for the forthcoming earnings reporting and dividend season in Q1, 2024, the equities market exhibited a nuanced trend.

Investors treaded cautiously across sectors, diligently seeking fundamentally strong yet attractively priced stocks. The index’s retracement to its consolidation range, coupled with the formation of a reversal pattern, hinted at a potential bearish sentiment following a recent correction.

Looking ahead to the new week, Cowry Assets Management Limited said “our expectations include further profit-taking activities and potential market corrections following the recent surge. Investors are likely to continue rebalancing their portfolios in anticipation of the reporting and dividend earnings season.

“Additionally, caution may prevail in the market as stakeholders await the planned stress test of the capital adequacy ratio of Nigerian banks with international operations. We are of the view that this cautious sentiment is underscored by prevailing global risks, including high inflation and FX volatility, prompting investors to tread cautiously as they await the anticipated Santa Claus rally.

“Amidst all these, we maintain our advice to investors on taking positions in stocks with sound fundamentals and whose earnings yield and earnings per share support higher payout ratio.”

Analysts at Cordros Securities Limited stated “we expect the market to remain mixed in the coming week as investors cherry-pick counters given the absence of any significant positive catalysts. Overall, we reiterate the need for investors to seek positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.”