The benchmark index crossed the 30,000 points, market value rose by N242 billion and investors increased stakes above average by about 17 per cent to about N8 billion as the impetus from the new foreign exchange (forex) policy of the Central Bank of Nigeria (CBN) continued to tickle shares at the Nigerian stock market.
For the second consecutive trading session, equities surged to new high on Wednesday as increasingly bullish transactions pushed the overall market position to its best position in eight months. The All Share Index (ASI), the main index that tracks prices at the Nigerian Stock Exchange (NSE), leapt by 2.40 per cent across the 30,000 points to closeon Wednesday at 30,127.82 points as against its opening index of 29,422.71 points. It is the highest index point since October 2015.
Aggregate market value of all quoted equities at the NSE also rose correspondingly by N242 billion to close at N10.347 trillion compared with its opening value of N10.105 trillion. The sustained gain built the nearly six-month average year-to-date return to 5.19 per cent.
With two advancers to every decliners and substantial gains among the highly capitalised stocks, the positive market position was driven by widespread positive sentiments, especially in the banking and consumer goods sectors.
Most sectoral indices closed higher after 31 stocks appreciated against 16 stocks that depreciated. The NSE Banking Index rose by 2.9 per cent. The NSE Consumer Goods Index closed appreciated by 1.2 per cent. The NSE Industrial Goods Index rose by 0.8 per cent while the NSE Insurance Index inched up by 0.6 per cent. However, the NSE Oil and Gas Index dropped marginally by 0.3 per cent.
Nestle Nigeria, NSE’s highest priced stock, again led the gainers’ list with a gain of N16 to close at N832. Dangote Cement, Nigeria’s most capitalised stock, followed with a gain of N9.25 to close at N194.25. Guinness Nigeria rose by N2.45 to close at N106.45. Seven-Up Bottling Company rallied N2 to close at N140. GlaxoSmithKline Consumer Nigeria rose by N1.68 to close at N18.21. Nigerian Breweries, Nigeria’s second most capitalised stock, garnered N1.31 to close at N143.80. Guaranty Trust Bank, the most capitalised financial services company, added N1.15 to close at N23.20. Total Nigeria gained 70 kobo to close at N180 while Zenith Bank rose by 63 kobo to close at N17.32 per share.
With two gainers to every loser, increased open buy market orders virtually turned the equities market into a seller’s market, thus allowing divesting investors to close their deals at higher prices. The cumulative effect lifted the benchmark index across the 30,000 index points.
The momentum of activities continued to improve. Turnover rose to 514.86 million shares valued at N7.93 billion in 5,727 deals. Banking stocks were atop the activities chart. Guaranty Trust Bank was the most active stock with a turnover of 96.35 million shares valued at N2.23 billion. Access Bank followed with a turnover of 84 million shares valued at N523.4 million while Zenith Bank International placed third with a turnover of 60 million shares worth N1.02 billion.
On the downside, Lafarge Africa led the losers’ list with a loss of N4.39 to close at N73.51. Seplat Petroleum Development Company followed with a loss of N1.03 to close at N348.97. Conoil dropped by 89 kobo to N20.96. Cement Company of Northern Nigeria lost 55 kobo to close at N7.45. Mobil Oil Nigeria dropped by 50 kobo to close at N169. Transnationwide Express dropped by 13 kobo to close at N1.30. Tiger Branded Consumer Goods lost 11 kobo to close at N4.97 while Dangote Sugar Refinery declined by 10 kobo to close at N6.89 per share.
Analysts’ consensus indicated that the bullish market was due to new forex policy, which removed the official fixed peg on Naira to allow the currency to flow according to market forces. The CBN had last week’s Wednesday released the framework and on Monday started the implementation of its new forex policy. The apex bank had also on Mondaylaunched a one-off intervention to clear the backlog of forex demand on Monday, leaving the forex market on a plain level field.
Analysts at FSDH Merchant Bank stated that the rally was due to the new forex policy. Analysts at Afrinvest Securities also agreed with this position but cautioned that profit-taking might moderate the rally going forward.
“Nevertheless, there is a tendency for the bullish run to taper due to some end of the week profit taking by investors. Hence we suggest investors should trade cautiously in the short term and seek best entry price,” Afrinvest Securities stated.
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