Nigeria’s equity market sees biggest gain in 5 months

The Nigeria’s equities market maintained its bullish run for the eleventh consecutive day on Monday, buoyed by investors’ appetite in bellwether stocks–MTNN, Airtel Africa, and Zenith Bank

At the close of trading, the all-share index advanced 2.11 percent- the biggest since May 5 when it gained 3.12 percent, the year to date return also hit the positive region at 2.65 percent-the highest in six months.

The recent rebound in the equities market has been closely linked with advancement in risk appetite for equities on the back of the relatively unattractive yields in the fixed income market. This has been further boosted by counters with strong fundamentals and relatively cheap valuations.

On Monday, total volume of trades increased by 31.4 percent to 603.95 million units, valued at NGN7.42 billion and exchanged in 5,984 deals. Zenith Bank was the most traded stock by volume and value at 204.69 million units and N3.83 billion, respectively.

Sectoral performance was positive, following gains in the Banking at +3.4 percent; Insurance at +2.0 percent; Oil & Gas at +0.8 percent; Industrial Goods at +0.4 percent and Consumer Goods at +0.4 percent.

Market sentiment, as measured by the market breadth, was positive (3.6x), as 36 tickers gained relative to 10 losers. Glaxosmith (+10.0%) and Redstarex (+10.0%) topped the gainers’ list, while TrippleG (-10.0%) and Oando (-8.7%) recorded the largest losses of the day.

Gbolahan Ologunro, equity analyst at CSL Stockbrokers, said factors that have contributed to this rally include, a robust system liquidity, depressed yields in the fixed income market, alongside early positioning for FY 2020 dividends, noting that the underpinning renewed appetite for stocks, suggests that the rally is unlikely to abate in the short term.

“However, we are likely to see a pull back in the coming trading days as investors book on stocks that have recorded significant gains over the past weeks,” Ologunro said.