Banking, consumer goods stocks buoy stock market rebounds

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By Peter Egwuatu

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The stock market closed higher Week on Week, WoW, with the banking and consumer goods stocks being the toast of investors last week.

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The Financial services industry (measured by volume) led the activity chart with 2.006 billion shares valued at N99.697 billion traded in 96,171 deals, thus contributing 71.17% and 54.63% to the total equity turnover volume and value, respectively. The Consumer Goods Industry followed with 178.863 million shares worth N7.872 billion in 26,637 deals. Third place was the Oil and Gas Industry, with a turnover of 151.237 million shares worth N38.309 billion in 16,879 deals.

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Analysts noted that investors returned to fundamentally strong banking, consumer goods and other blue-chip stocks, adding that the market witnessed renewed bargain hunting following recent price corrections, with institutional investors taking advantage of lower entry prices in fundamentally sound stocks. Further analysis of the market last week shows that the Nigerian Exchange market capitalisation, which measures the total value of equities, surged by N613 billion to close at N157.057 trillion from N156.444 trillion the previous week.

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The market capitalisation had the penultimate week rebounded to a bullish note with investors gaining N9.342 trillion from their investment listed on the Exchange.

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Similarly, another benchmark performance indicator, NGX All Share Index, ASI, up 0.14% to close at 243,462.13 points from 243,798.76 points the previous week.

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Trading in the top three equities, namely First Holdco Plc, FCMB Group Plc and Access Holdings Plc (measured by volume), accounted for 939.402 million shares worth N57.673 billion in 19,051 deals, contributing 33.33% and 31.60% to the total equity turnover volume and value respectively.

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According to analysts, investors continued to position ahead of the release of second-quarter and half-year corporate earnings, particularly from the banking sector, where expectations remain upbeat following resilient first-quarter numbers and improved macroeconomic conditions.

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Reacting to market performance and outlook, investors at InvestData Consulting Limited, stated: “Despite the positive outlook, investors are expected to remain cautious around stocks that have recorded substantial gains since the beginning of the year, as profit-taking could periodically interrupt the rally.

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“Going forward, market direction will likely be influenced by the release of second-quarter corporate earnings, developments in the global oil market, movements in fixed-income yields and expectations surrounding monetary policy. Investors are also expected to monitor foreign portfolio flows, exchange rate stability and inflation data for further clues on the sustainability of the current market rally. Should earnings meet or exceed market expectations, the NGX could extend its upward momentum as institutional investors continue rotating into fundamentally strong sectors.”

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