NGX crosses N160trn as investors rotate into Aradel, MTNN desp

Nigeria’s equities market opened the week with a paradox for investors: the NGX All-Share Index advanced 0.29 per cent, and market capitalisation gained N1.04 trillion, pushing the market above the N160 trillion threshold, even as 44 stocks declined against only 11 gainers in a session dominated by sharp losses in several equities.

The NGX All-Share Index closed at 247,699.78 points, lifting its year-to-date return to 59.18 per cent, from 58.72 per cent at the end of the previous week.

Market capitalisation rose 0.65 per cent to N160.60 trillion, with the latest increase also reflecting new share listings, including additional shares from Dangote Sugar Refinery. The broader market remained firmly in positive territory despite weak underlying breadth.

The session’s gains were concentrated in a handful of heavyweight and actively traded stocks.

Aradel Holdings led the value side of the market with trades worth N7.59 billion, while its share price gained 5.38 per cent. MTN Nigeria rose 2.45 per cent and International Breweries advanced 3.02 per cent.

Those gains offset significant declines in Champion Breweries, which fell 8.79 per cent, WAPIC Insurance, down 7.08 per cent, and Jaiz Bank, which lost 6.36 per cent.

Caverton Offshore Support Group was the biggest decliner, falling 10 per cent, while Zichis led the gainers with a 9.97 per cent increase.

The divergence between the index and market breadth is significant for investors. It suggests that Monday’s headline gain was not the result of broad-based buying but was concentrated in selected counters with sufficient market weight or trading interest to support the index.

Trading activity also weakened considerably.

Total volume fell 81.81 per cent to 407.85 million units, while transaction value declined 62.88 per cent to N27.25 billion.

AccessCorp led the volume chart with 40.04 million shares, while Aradel dominated transaction value.

The combination of rising index levels, falling turnover and extremely weak breadth points to a market where investors remain selective rather than broadly risk-on.

For portfolio managers, the latest session reinforces the importance of stock selection after the NGX’s exceptional gains this year. With the market already up almost 60 per cent year-to-date, the room for indiscriminate buying becomes narrower as investors increasingly assess earnings growth, valuations, dividend prospects and the ability of individual companies to withstand elevated interest rates and operating costs.

The alternative securities market also started the week on a stronger footing.

The NASD Securities Index gained 1.68 per cent to 4,488 points, while market capitalisation rose by the same margin to N2.69 trillion.

Its year-to-date return improved to 26.65 per cent, although trading remained considerably smaller than on the NGX.

Volume increased 131.39 per cent to 385,170 units, while transaction value climbed 50.83 per cent to N18.05 million across 21 trades.

SDCSCS Plc gained 9.09 per cent to lead the advancers, while SDNASD Plc declined 11.11 per cent to record the biggest loss.

The domestic market’s performance came against a more challenging global backdrop as renewed geopolitical tensions pushed oil prices higher and revived concerns over inflation.

Brent crude climbed to around $97.50 a barrel on Monday, its highest level in six weeks, after fresh US-Iran attacks on shipping around the Strait of Hormuz raised fears of a deeper disruption to global oil supplies. Oil prices were up about 35 per cent since the conflict began in February.

Traffic through the Strait has also fallen sharply. Reuters reported that average daily commodity-ship traffic over the past 10 days dropped to 10 vessels, the lowest level since May, after attacks involving US and Iranian forces.

For Nigeria, the oil shock presents a mixed investment signal. Higher crude prices can improve government and external-sector revenues in an oil-dependent economy, but prolonged disruption could also increase imported fuel and transport costs and reignite inflationary pressures.

The latest domestic currency movement offered some relief.

The Nigerian Foreign Exchange Market appreciated by 0.05 per cent to N1,320.56/$, extending the period of relative currency stability and potentially easing the naira cost of imported inputs and foreign-currency obligations for companies.