The Nigerian Stock Exchange (NSE) profited from a beehive of activities on its trading floor last week with market capitalisation appreciating by N334 billion following bargain hunting, despite political risks.
Specifically, the market capitalisation which opened at N11.424 trillion gained N334 billion or 2.92 per cent to close at N11.758 trillion.
Also, the All-Share Index rose by 893.56 points or 2.92 per cent to close at 31,529.92 compared with its 30,636.36 opening figure.
Analysts who spoke with the News Agency of Nigeria (NAN) attributed the growth to positive sentiments ahead of 2018 earnings season and low interest rates in the United States of America.
Prof. Uche Uwaleke, Head of Banking and Finance Department, Nasarawa State University Keffi, said the growth was due to positive sentiments regarding expected corporate results.
Uwaleke explained that investors were taking position in the stock market in anticipation of enhanced dividend, especially the banking stocks.
He said the rally, which began three weeks ago, was interrupted by the Chief Justice of Nigeria saga and heightened political tension.
“Last week has been politically uneventful. This week’s performance will be mixed and will most likely close lower than last week on account of the polls,” Uwaleke said.
Mr Ambrose Omordion, the Chief Operating Officer, InvestData Ltd., said foreign investors were taking position in the debt market and the equities market due to low interest yield in the United States.
Omordion said investors were taking advantage of hight interest rate and yields in the bond market and equities market to offset lower yields abroad, after US Federal Reserve Bank signaled it would not increase rates.
He added that expected positive earnings reporting season and big expectations from the banking stocks contributed to the market growth.
Analysts at Cordros Capital said foreign and domestic players shunned the looming election risk as the Nigeria’s equity market returned to a cheerful mood.
They, however, urged investors to trade cautiously amidst uncertainties ahead of the elections.
“Looking ahead, we continue to guide investors to trade cautiously amidst brewing political jitters ahead 2019 elections, and the absence of a positive market trigger.
“However, we believe positive macroeconomic fundamentals will drive recovery post-election,” they said.
NAN reports that breakdown of the price movement chart showed that Regency Assurance led the gainers’ table in percentage terms, gaining 19.05 per cent or 4k to close at 25k per share.
Dangote Flour Mills followed with a gain of 18.10 per cent or N1.05 to close at N6.85, while Guaranty Trust Bank added 14.69 per cent or N4.95 to close at N38.65 per share.
Conversely, Royal Exchange Assurance topped the losers’ chart in percentage terms with a loss of 13.33 per cent or 4k to close at 26k per share.
Guinea Insurance trailed with 13.04 per cent or 3k to close at 20k, while Champion Breweries dropped by 10 per cent or 18k to close at N1.62 per share.
NAN reports that a total turnover of 1.89 billion shares worth N26.88 billion were traded by investors in 19,213 deals.
This was against a turnover of 1.45 billion shares valued at N14.79 billion exchanged in 19,318 deals in the previous week.
The financial Services Industry remained the most active in volume terms, accounting for 1.49 billion shares worth N19.72 billion traded in 12,581 deals.
The sector contributed 79.10 per cent and 73.37 per cent to the total equity turnover volume and value respectively.
The consumer goods sector followed with an exchange of 144.43 million shares worth N4.55 billion traded in 2,484 deals.
The third place was conglomerates industry with a turnover of 143.32 million shares worth N220.05 million in 998 deals.