Nigerian Equities Market Records Impressive Gain of N1.81 Trillion in Volatile July

The Nigerian equities market closed with a N1.81 trillion gain in the month of July despite a recent dip in its All-Share Index (ASI) and equities market capitalisation.

As the market closed on Monday, July 31, the ASI stood at 64,337.52 points, representing a 1.10 percent decrease while the market capitalisation settled at N35.011 trillion, down from the preceding day’s N35.403 trillion.

The month started on a promising note with the ASI and equities capitalisation settling at 60,968.27 points and N33.197 trillion, respectively. Throughout July, the market exhibited a strong upward trend, experiencing a 5.53 percent increase by the end of the month.

However, as the new trading week began, investor sentiment took a hit, resulting in a loss of N392 billion on Monday.

The market’s negative take-off was predominantly driven by notable declines in key stocks, with ETI (Ecobank Transnational Incorporated), Dangote Sugar Refinery, NPF Microfinance Bank, Livestock Feeds, and Caverton Offshore Support Group among the most significant contributors to the downturn.

ETI witnessed a sharp decline, falling from N17 to N15.30, marking a loss of N1.70 or 10 percent, while Dangote Sugar Refinery dropped from N30 to N27, down by N3 or 10 percent. These bearish movements played a major role in pushing the overall positive return year-to-date (YtD) down to 25.53 percent.

Despite the temporary setback, investor activity remained active with 673,424,564 shares valued at N6.474 billion exchanged in 9,788 deals. Among the most traded stocks were Abbey Mortgage Bank, Fidelity Bank, Union Bank, FCMB Group, and Universal Insurance, reflecting the continued interest of investors in these companies.

Meristem research analysts said, “we project that the tickers in the banking sector will be instrumental in spurring buying activities in the local bourse.”

“We highlight the broad positive H1:2023 earnings results in the sector as a primary driver for the expected upbeat mood. Thus, we anticipate this to spillover to other sectors.

“In addition, profit taking on some stocks last week placed them at attractive entry prices for investors seeking bargain hunting opportunities. As such, we do not expect a drastic rotation of funds out of the equities market.

“However, we do not rule out the possibility of further selloffs on tickers (especially the consumer goods) due to unsatisfactory H1:2023 performance impacted by inflationary pressures and FX revaluation losses,” the report said.

“Overall, we anticipate the overriding sentiment in the market to be positive during the week,” Meristem analysts added.