Equities Market Reverses Losses with N488bn Gain Despite Delistings

Last week, the Nigerian stock market experienced a remarkable turnaround, shrugging off the delisting of three companies to post a 0.87% gain. The All-Share index rose by 868.12 points to close at 100,539.40 points, while market capitalization increased by N488 billion to N56.929 trillion.

Despite the delistings, the market breadth remained positive, with 37 stocks appreciating in price, 34 declining, and 80 remaining unchanged. United Capital led the gainers, surging 42.78% to N40.55 per share, while Linkage Assurance topped the decliners, falling 24.56% to 86 kobo per share.

Sectoral performance was mixed, with the NGX Industrial Goods Index posting modest gains, while the NGX Insurance Index led the laggards, declining 4.86%. The Financial Services Industry dominated trading activity, accounting for 77.08% of total equity turnover volume and 72.38% of total value.

Overall, investors traded 2.827 billion shares worth N42.366 billion in 44,277 deals, indicating a positive sentiment in the market.

This positive movement occurred despite the delisting of three companies; Niger Insurance Plc, Resort Savings and Loans Plc, and RAK Unity Petroleum Plc, effective July 18, 2024. These delistings were in accordance with Clause 15 of the General Undertaking in the Rule Book of the Exchange, which allows delisting due to insufficient public interest, non-compliance with listing terms, or if the company becomes a subsidiary of another company.

The market breadth for the week was positive as 37 equities appreciated in price, 34 equities depreciated in price, while 80 equities remained unchanged. United Capital led the gainers table by 42.78 per cent to close at N40.55, per share. Africa Prudential followed with a gain of 33.78 per cent to close at N9.90, while Cutix went up by 29.65 per cent to close to N5.99, per share.

On the other side, Linkage Assurance led the decliners table by 24.56 per cent to close at 86 kobo, per share. Veritas Kapital Assurance followed with a loss of 11.67 per cent to close at N1.06, while Vitafoam Nigeria declined by 10.38 per cent to close at N19.00, per share.

Overall, a total turnover of 2.827 billion shares worth N42.366 billion in 44,277 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 2.765 billion shares valued at N85.230 billion that exchanged hands previous week in 40,796 deals.

The Financial Services Industry (measured by volume) led the activity chart with 2.179 billion shares valued at N30.667 billion traded in 25,260 deals; contributing 77.08 per cent and 72.38 per cent to the total equity turnover volume and value respectively.

The Industrial Goods Industry followed with 246.921 million shares worth N2.039 billion in 2,068 deals, while the Oil and Gas Industry pulled a turnover of 107.218 million shares worth N1.704 billion in 3,128 deals.

Trading in the top three equities namely Jaiz Bank, Cutix and FCMB Group

(measured by volume) accounted for 1.140 billion shares worth N4.632 billion in 2,701 deals, contributing 40.32 per cent and 10.93 per cent to the total equity turnover volume and value respectively.

Meanwhile, capital market analysts expected the positive trend to persist on the Nigerian stock market this week as more earnings releases and attractive dividend are declared by Companies.

Also, market players will place significant bets ahead of the forthcoming Monetary Policy Committee meeting scheduled for this week. Investor sentiment will be bolstered by the publication of half-year earnings reports and the declaration of juicy interim dividends by early filers.

This week, analysts at Cowry Assets Management Limited said “the anticipation of more earnings releases and attractive dividend declarations by corporates is expected to drive positive sentiment across counters.

“However, the outcome of the Monetary Policy Committee (MPC) meeting, along with other economic news, could stir mixed sentiments. Market players will be closely analysing these developments to understand their potential impact on investments.

“As investors digest the outcomes of the MPC meeting and other economic indicators, their reactions could influence market trends in various directions.Therefore, while positive corporate earnings and dividends might uplift the market, economic policies and news will play a critical role in shaping overall investor sentiment. As the changing market structure and fundamentals persist, investors are advised to position themselves in stocks with sound fundamentals.”

In a different view, Afrinvest Limited noted that “this week, we anticipate a mildly negative close, driven in part by cautious trading on banking tickers due to increased spotlighting on the sector and on the other, trading attraction to the bond PMA slated for Tuesday.”