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Nigerian Stocks Rise by 0.1% Despite Election Uncertainties and Foreign Investor Caution

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Nigerian stocks rose by 0.1% on Monday, despite election uncertainties and foreign investor caution, shooting up the return on the total stocks listed on the bourse so far this year to 6.1%, Investors King reports.

However, the Nigerian stock market still struggles to regain its pre-pandemic buoyancy, with trade remaining largely muted as foreign investors stayed away from Nigerian equities for fear that the current dollar shortage may hinder them from redeeming their investment.

The current dilemma has become more complicated with uncertainty as Nigerians go to the polls later this month. The recent electioneering uncertainties in Africa’s largest economy have put pressure on the stock market.

This is because investors are always skeptical about what might happen when there is a change in the country’s leadership. As the election date draws near, more investors will be watching the market closely to avoid any significant loss due to election-related uncertainties.

Despite these uncertainties, market breadth was positive on Monday, as 17 gainers were reported compared to 9 decliners. The top five gainers were Conoil, MRS, Chams, GSK, and Champion Breweries. Meanwhile, the top five losers were CWG, Fidelity, NAHCO, FBN Holdings, and Vitafoam.

The market capitalization advanced to N29.6 trillion, which represents a 6.1% growth so far this year. This is good news for investors, but it remains to be seen whether this upward trend will continue or not.

Investment bank United Capital said in its outlook note for this week, “We expect the depressed interest rate environment to continue to favour the equities market in line with our expectations for Q1-2023. We note that the profit-taking activities seen during the week serve as a caution to market participants as the bears may fully resume.”

The caution to market participants is that the bears may fully resume, implying that the market may fall again. The profit-taking activities seen during the week, as noted by United Capital, suggest that some investors might be exiting the market while the market is still in the positive territory.

However, trade remains largely muted, and bears may fully resume, cautioning market participants. Investors should continue to watch the market closely to avoid significant losses due to election-related uncertainties.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Nigerian Exchange Limited

Nigeria’s Market Falls 1.09% Amid Decline in Key Sectors

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Nigeria’s stock market closed the trading week ended Friday, April 12, with a decline of 1.09% following a downturn influenced by notable drops in the banking, insurance, and consumer goods sectors.

This shift resulted in a loss of about N638 billion for investors during the two-day trading week, which was shortened due to public holidays for Eid Mubarak.

The Nigerian Exchange Limited’s (NGX) All-Share Index (ASI) decreased from an opening high of 103,437.67 points to 102,314.56 points.

Meanwhile, market capitalization also dropped from N58.498 trillion to N57.860 trillion over the review period.

The market’s month-to-date (MtD) performance fell by 2.15%, and the year-to-date (YtD) return is now at 36.83%.

Futureview research analysts had previously forecasted a mixed performance in the equities market as investors adjusted their positions in anticipation of upcoming corporate actions and dividend payouts.

The analysts also predicted a possible shift in focus towards the fixed income market, which could influence short-term investment decisions.

While the market faced challenges this week, analysts expect a resurgence of buying interest driven by upcoming corporate actions and earnings reports, attracting investors looking to benefit from dividend payments.

Their recommendation to investors is to consider investing in high-quality stocks with strong fundamentals for potential returns.

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Nigerian Exchange Limited

VFD Group Plc’s Rights Issue Listed on NGX’s Daily Official List

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The Nigerian Exchange Limited (NGX) has listed VFD Group Plc’s Rights Issue on its Daily Official List.

The move follows the approval by the Securities and Exchange Commission (SEC) and represents a crucial step in the company’s growth trajectory.

The Rights Issue comprises 63,342,455 ordinary shares of 50 kobo each priced at N197.33 per share, bringing the total value of the issue to N12.499 billion. With this listing, VFD Group Plc’s total issued and fully paid-up shares have surged from 190,027,365 to 253,369,820 ordinary shares.

According to a report by NGX, the additional shares listed arose from VFD’s Rights Issue on the basis of one ordinary share for every three ordinary shares held as of October 12, 2023.

This move underscores VFD Group Plc’s commitment to expanding its shareholder base and enhancing liquidity in the market.

The approval by SEC for the Rights Issue further solidifies VFD Group Plc’s position in the market. Gbeminiyi Shoda, the Group Company Secretary of VFD Group Plc, confirmed that the Qualification Date for the Rights Issue was October 12, 2023, with the application list opening on December 20, 2023, for a maximum period of 31 days.

VFD Group Plc’s Rights Issue comes on the heels of its recent listing on the Main Board of the Nigerian Exchange Limited (NGX). The listing of 190 million units of shares at N244.88 per share added N46.527 billion to NGX’s market capitalization, reflecting the company’s growing influence in the Nigerian capital market.

VFD Group Plc, known for its sector-agnostic proprietary investment approach, aims to create positive and socially conscious ecosystems by aggregating potentially viable businesses. The Rights Issue listing underscores the company’s strategic move to increase visibility, access capital, and enhance liquidity, ultimately benefiting its investors and stakeholders.

Investors and market analysts are closely watching the developments surrounding VFD Group Plc as it continues to expand its footprint in the Nigerian financial landscape. With the successful listing of its Rights Issue on NGX, the company is poised for further growth and value creation in the market.

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Nigerian Exchange Sees Historic N18.203tn Gain in Q1, 2024

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The Nigerian Exchange (NGX) has kicked off 2024 with an unprecedented gain as stock investors pocketed N18.203 trillion gain in the first quarter alone.

Investors are reaping the rewards of a bullish trading pattern that has extended from the inauguration of President Bola Ahmed Tinubu in 2023 into the new year.

The Exchange All-Share Index closed at 74,773.77 index points in 2023, a 45.90% gain it carried into the new year while the market capitalization surged to N40.917 trillion by the end of the year.

The first quarter of 2024 witnessed the continuation of this bullish trend as many companies grew in market capital and profit.

In the first quarter, FBN Holdings joined the trillion-naira club while Dangote Cement emerged as the first entity to achieve a market cap of N10tn.

The listing of Transcorp Power Plc further fueled market capitalisation close to the historic N60 trillion mark by March’s end.

Oscar Onyema, the immediate past Managing Director/Chief Executive Officer of the Nigerian Exchange Group, likened the market’s boom to the pre-2008 global meltdown period, highlighting the parallels in euphoria and growth.

Despite challenges posed by escalating inflation, potential interest rate adjustments, and volatile exchange rates, investor confidence remained steadfast.

The NGX-Alternative Security Market recorded a 135.25% gain amid economic uncertainties.

Analysts dissecting the market’s performance emphasized the role of sentiment over fundamentals, indicating a surge driven by optimism rather than concrete economic improvements.

While profit-taking activities and market volatility punctuated the quarter, the overall trajectory remained upward.

Looking ahead, projections for the second quarter anticipate mixed performance, with factors like macroeconomic instabilities and corporate actions shaping investor sentiment.

Nevertheless, the NGX’s stellar performance in Q1 2024 stands as a testament to the resilience and potential of the Nigerian equities market, offering a beacon of hope amid global economic uncertainties.

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