Nigerian Stock Investors’ Renewed Interest Bolsters the Nigerian Stock Market Last Week

Stock investors at the Nigerian Stock Exchange gained N87 billion last week on renewed positive sentiment.

In the four days trading week, investors traded 1.103 billion shares valued at N9.876 billion in 16,616 transactions. This was lower than the 1.469 billion shares worth N23.553 billion that were exchanged in 22,991 transactions in the previous week.

In terms of volume traded, the financial sector led activity table with 814.292 million shares valued at N7.186 billion but traded in 8,352 deals. The sector contributed 73.82 percent and 72.76 percent to the total equity turnover volume and value, respectively.

This was followed by the oil and gas sector with 66.78 million shares worth N143.050 million in 1,044 deals. The Consumer Goods sector came third with a turnover of 57.842 million shares valued at N1.022 billion but traded in 2,559 deals.

The top three equities traded during the week were Mutual Benefits Assurance Plc, Guaranty Trust Bank Plc and FBN Holdings Plc. The three top traded equities accounted for 485.307 million shares worth N5.048 billion and contributed 44.00 percent and 51.11 percent to the total equity turnover volume and value, respectively.

The market capitalisation of listed equities rose by 0.67 percent or N87 billion from N13.050 trillion in the previous week to N13.137 trillion last week.

Similarly, the NSE All-Share Index gained 0.67 percent or 166.37 basis points from 25,016.30 bps reported in the previous week to 25,182.67 this week.

On a monthly basis, the exchange has lost 0.34 percent in June. While it has gained 18.23 percent this quarter to moderate this year’s decline to -6.18 percent, down from over 12 percent in the first quarter.

The renewed interest in the stock market was as a result of central bank policies restricting activities of local investors in the fixed income market and forcing banks under the 65 percent loan to deposit ratio policy to increase credit facility to the real sector. Also, the low share values, largely weighed upon by the coronavirus pandemic, lured local investors back into stocks with strong fundamentals but impacted by COVID-19 lockdown and economic disruption.

During the week, the NSE Insurance Index gained the most to extend its year-to-date return to 7.9 percent. The insurance sector gained 4.83 basis points or 3.69 percent from 130.93 bps reported in the previous week to 135.76 bps last week.

On a monthly basis, the sector has gained 3 percent so far and 13.7 percent this second quarter.