Stock Market Gained N619.45bn in May as Analysts Predict Positive Sentiment

Kayode Tokede

Nigerian stock ended the month of May 2024 with a surprise gain of N619.45 billion as investors were divesting to the fixed income market in a move to hedge their investment against rising inflation rate.

Specifically, the market capitalization appreciated by 1.12per cent or N619.45 billion to close the week ending May at N56.172 trillion from N55.553 trillion the stock market closed for trading in April,

The Nigerian Exchange Limited All-Share Index (NGX ASI) increased by 1.09per cent or 1,074.75basis points to close May 2024 at 99,300.38 basis points from 98,225.63 basis points it opened for trading in the month under review.

Despite a 5.03 per cent decline this Quarter-to-Date (QtD) performance, the NGX ASI remains strong with a 32.8per cent Year-to-Date (YtD) gain.

During the month, banking sector gained 2.97per cent, as the NGX Banking Index closed at 797.37 points, as against 774.35 at the end of April.

The NGX Consumer Goods Index posted a marginal 1.19 per cent gain during the month driven by gains recorded by stocks such as Dangote Sugar, which gained 20.82 per cent in the month, and International Breweries, which gained 27.40per cent.

The Oil and Gas Index also gained 2.06 per cent during the month, occasioned by the 3.6 per cent gain posted by Seplat Energy during the month.

May is traditionally a selling month for stocks as it often coincides with dividend payments and mark-downs. Investors also prefer to take profits in May, leading to negative returns.

In May 2024, the NGX recorded a market turnover volume of 9.955 billion shares traded across 197,056 deals, with a value of N198 billion.

However, THISDAY gathered that the NGX ASI ended the last trading week in May positive, closing higher by 1.73 per cent week-on-week (W-o-W) to close at 99,300.38 points. Similarly, market capitalisation gained N955 billion W-o-W to close at N56.172 trillion.

Across the sectoral gauges, performance was predominantly bullish, except for the Industrial Goods sector, which experienced a slight weekly loss of 0.13 per cent. On the other side, the NGX Oil & Gas index saw a weekly increase of 9.08 per cent, while the NGX Banking index rose by 8.72 per cent.

The NGX Insurance index recorded a weekly gain of 3.88 per cent, while the NGX Consumer Goods index advanced by 2.04 per cent.

The market breadth for the week was positive as 45 equities appreciated in price, 25 equities depreciated in price, while 84 equities remained unchanged. Fidelity Bank led the gainers table by 22.89 per cent to close at N10.20, per share. Dangote Sugar Refinery followed with a gain of 20.51 per cent to close at N47.00, while NASCON Allied Industries went up by 20.15 per cent to close to N40.85, per share.

On the other side, C & I Leasing led the decliners table by 13.66 per cent to close at N2.97, per share. NPF Microfinance Bank followed with a loss of 11.11 per cent to close at N1.60, while FTN Cocoa Processors declined by 8.33 per cent to close at N1.10, per share.

Overall, a total turnover of 2.189 billion shares worth N31.303 billion in 39,362 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 1.986 billion shares valued at N40.715 billion that exchanged hands prior week in 38,487 deals.

The Financial Services Industry (measured by volume) led the activity chart with 1.914 billion shares valued at N23.922 billion traded in 21,717 deals; contributing 87.41 per cent and 76.42 per cent to the total equity turnover volume and value respectively. The Oil and Gas Industry followed with 55.349 million shares worth N3.093 billion in 2,109 deals, while the Agriculture Industry traded a turnover of 45.085 million shares worth N377.619 million in 1,615 deals.

Trading in the top three equities; Abbey Mortgage Bank, Access Holdings and Zenith Bank (measured by volume) accounted for 1.129 billion shares worth N14.914 billion in 6,494 deals, contributing 51.57 per cent and 47.64 per cent to the total equity turnover volume and value respectively.

Financial analysts stated that Nigerian equities this week are expected to continue their bullish trend, driven by profit-taking and portfolio rebalancing as the new trading month.

The weekly bullish trend continued in the local bourse, driven by high trade volumes, positive market internals, and strong buying sentiments, particularly in blue-chip companies within the mid and medium cap categories.

On market outlook, the chief operating officer of InvestData Consulting Limited, Mr. Ambrose Omordion said, “we expect positive sentiments to continue as players rebalance their portfolios in the midst of low valuation, dividend investing and reactions to Insurance corporate earnings that hitting NGX with dividend announcements, while taking advantage of pullbacks to position and rebalancing portfolio.

“This is amid the volatility and pullbacks that add more strength to upside potential. As such, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.”

Looking ahead, analysts at Cowry Assets Management Limited said, “the current bullish trend is expected to persist, driven by profit-taking and portfolio rebalancing as the new trading month approaches. Market pullbacks are anticipated to enhance the index’s upward potential, supported by the ongoing dividend earnings season. However, we continue to advise investors to trade on companies’ stocks with sound fundamentals.”

Investors on the local bourse enjoyed a pleasant week as the market concluded the session in green territory.