NSE trading floor. PHOTO: FEMI ADEBESIN-KUTI With the rising inflation throwing other investment windows into a negative real return, the Nigerian equity market, last week, witnessed another unprecedented rally that pushed the All-Share Index (ASI) by 7.5 per cent, the highest weekly gain in five weeks. It closed at 36,804.75 points, the highest level obtained since July 31, 2018.
Last week, the market witnessed sustained gains for the five trading sessions as the Nigerian Stock Exchange (NSE) ASI appreciated by 7.46 per cent to close the week at 36,804.75 while market capitalisation rose by N1.3 trillion to close at N19.236 trillion.
Similarly, all other indices finished higher while the NSE ASeM and NSE Growth Indices closed flat. Analysts linked the bull run to foreign investor interest in Airtel (+21.0 per cent) and bargain hunting in Dangote Cement (+14.5 per cent) and MTNN (+3.2 per cent).
The development triggered a month-to-date increase of five per cent and a year-to-date return of 37.1 per cent.
Analysts at Afrinvest said: “We anticipate a sustained bullish performance in the coming week as investors position in undervalued stocks.
Investdata Consulting Limited said: “Money flow index revealed the entrance of funds into the equity space amidst the low-interest rates regime and rising inflation that has further thrown other investment windows into a negative real return.”
Codros Securities said: “In the short term, we still see scope for expansion in valuation multiples as the hunt for alpha-yielding opportunities in the face of increasingly negative real returns in the fixed income market remains positive for stocks.
“However, we advise investors to take positions in only fundamentally-justified stocks as the weak macro environment remains a significant headwind for corporate earnings.”
A breakdown of market performance last week showed that the equities market reopened the week on a positive note, causing the ASI to appreciate by 1.73 per cent due to buying interest in Dangote Cement and 25 other stocks.
The ASI rose by 592.70 points or 1.73 per cent to 34,843.44 points. Also, investors gained N309 billion in value as market capitalisation went up to N18.211 trillion.
The upturn was impacted by gains recorded in medium and large capitalised stocks, amongst which are; Airtel Africa, Dangote Cement, Guinness Nigeria, Lafarge Africa and BOC Gases Nigeria.
The stock market extended its gaining streak on Tuesday, resulting in a further rise in market capitalisation by N200 billion. The ASI gained 381.78 absolute points, representing a gain of 1.10 per cent […]
