Banks’ index gains 5.1% as investors stake N49 billion in equities

For the first time in several months, the banking index led the gainers’ chart on the Nigerian Exchange Limited (NGX) with 5.1 per cent, following 14.7 per cent, 9.8 per cent and 7.9 per cent price appreciation recorded by United Bank for Africa PLC (UBA) Plc, FBN Holdings Plc and Zenith Bank Plc last week.

The consumer goods and insurance indices followed with 2.3 per cent and 1.8 per cent appreciation. The sector gain was due to price appreciation of 19.2 per cent, 15.1 per cent and 24.2 per cent recorded by Nigerian Breweries, Unilever and Veritas Kapital. Sovereign Trust Insurance also recorded an eight per cent rise in value at the end of yesterday’s transactions.

The oil and gas index trailed with a one per cent gain, occasioned by 60.5 per cent and a one per cent gain recorded by Oando and Japaul Gold. However, the industrial goods index shed 3.7 per cent, following 10 per cent and 3.7 per cent losses in BUA Cement and Berger Paints.

On the price movement chart last week, the bulls dominated three of the five trading sessions as 46 equities appreciated higher than 40 equities recorded in the previous week.

Consequently, renewed investors’ interest in MTN Nigeria, Oando, UBA and Zenith Bank lifted the all-share index and market capitalisation by 0.9 per cent to close the week at 98,592.12 and N55.97 trillion as year-to-date (YTD) return increased to 31.9 per cent, up from 30.7 per cent recorded during the preceding week.

Reacting to the market outlook, analysts at Cowry Asset Management Limited said the current upward trend and renewed buying sentiments by investors are expected to persist due to the ongoing dividend earning season.

“As we await the half-year earnings reports from major banks in the coming weeks, investors are expected to continue repositioning for value, taking advantage of any market pullbacks. Nevertheless, we continue to advise investors to focus on fundamentally sound stocks,” Cowry noted.

Cordros Capital said earnings from the tier-1 banks will support positive sentiments in the near term, especially given the anticipation of interim dividends while investors’ sentiments are expected to be influenced by developments in the macroeconomic landscape and the movement of yields in the fixed-income market in the medium term.

Further breakdown of last week’s transactions indicated that a turnover of 2.7 billion shares worth N49 billion was recorded in 47,451 deals by investors on the Exchange, in contrast to 3.4 billion units, valued at N52 billion that was exchanged in 44,814 deals during August 2, 2024.

The financial services industry (measured by volume) led the activity chart with 1.9 billion shares valued at N31.9 billion traded in 23,467 deals, contributing 74 per cent to the total equity turnover volume. The oil and gas industry followed with 229.7 million shares worth N7.4 billion in 4,021 deals. The third place was the ICT industry, with a turnover of 113.9 million units worth N3 billion in 4,260 deals.

Trading in the top three equities namely Access Holdings Plc, Veritas Kapital Assurance Plc and United Bank for Africa Plc (measured by volume) accounted for 756 million shares worth N10.7 billion in 6,985 deals, contributing 28.2 per cent to the total equity turnover volume.
A total of 20,375 units of Exchange Traded Products (ETPs) valued at N5.9 million were exchanged in 148 deals compared to a total of 21,051 units valued at N2.2 million that changed hands in 97 deals.

Also,184,955 units of bonds, valued at N187.8 million were recorded in 40 deals compared to a total of 63,807 units worth N61.5 million recorded in 37 deals during the preceding week.