Nigeria’s stock market had a bullish run in the month of July, with listed equities recording a significant gain of about N1.81 trillion. The market surged by 5.53 percent during the period, reflecting the growing investor confidence in the country’s economy. The market had opened July with the All Share Index (ASI) and equities capitalization standing at 60,968.27 points and N33.197 trillion, respectively.
However, the Nigerian Exchange Limited (NGX) All-Share Index and equities market capitalization experienced a slight setback on Monday, July 31, as they depreciated by 1.10 percent. The market closed at 64,337.52 points and N35.011 trillion, compared to the preceding day’s figures of 65,056.39 points and N35.403 trillion. This decline resulted in investors losing N392 billion on the first day of the new trading week.
Some stocks that contributed to the market’s negative performance on Monday were ETI, Dangote Sugar Refinery, NPF Microfinance Bank, Livestock Feeds, and Caverton Offshore Support Group. ETI witnessed a drop from N17 to N15.30, losing N1.70 or 10 percent, while Dangote Sugar Refinery’s shares fell from N30 to N27, down by N3 or 10 percent.
Despite the dip, the market still boasts a positive return year-to-date (YtD) of 25.53 percent, indicating a general uptrend in investor sentiment throughout the year. In total, investors participated in 9,788 deals and exchanged 673,424,564 shares valued at N6.474 billion. Among the most traded stocks were Abbey Mortgage Bank, Fidelity Bank, Union Bank, FCMB Group, and Universal Insurance.
According to the commentary provided by Meristem research analysts on July 31, the banking sector is expected to play a significant role in driving buying activities in the local bourse. The analysts highlighted the positive H1:2023 earnings results in the sector as a primary driver for the anticipated upbeat mood. This positive sentiment is likely to spill over to other sectors as well.
Additionally, some stocks experienced profit-taking last week, resulting in attractive entry prices for investors seeking bargain-hunting opportunities. This suggests that there might not be a drastic rotation of funds out of the equities market. However, analysts caution against the possibility of further selloffs on certain tickers, especially in the consumer goods sector, due to unsatisfactory H1:2023 performance impacted by inflationary pressures and foreign exchange revaluation losses.
Despite these potential challenges, Meristem analysts remain optimistic, projecting an overall positive sentiment in the market during the week. The stock market’s resilience and positive trajectory reflect a growing confidence in Nigeria’s economic prospects and bode well for investors looking for opportunities in the country’s equities market.
