The Nigerian Exchange Limited (NGX) rebounded on Tuesday from the previous day’s losses with a gain of N25.72 billion.

This rebound was primarily driven by significant appreciation in the shares of Cornerstone Insurance, Jaiz Bank, Wapic Insurance, and 19 other stocks.

The market capitalisation rose by 0.05 percent to close at N56.61 trillion, while the All Share Index (ASI) increased to 100,067.77 points.

Insurance stocks were at the forefront of this recovery. Cornerstone Insurance led the gainers’ chart with a 10 percent increase to settle at N2.09 per share.

Jaiz Bank followed closely with a 9.95 percent rise to N2.21, and Wapic Insurance saw a 9.59 percent boost, ending the day at N0.80 per share.

Despite the overall positive trend, the market witnessed bearish activity, with 22 stocks recording gains and 24 stocks registering losses.

Leading the losers’ chart were RT Briscoe, which suffered a 9.86 percent decline to close at N0.64, Cutix Plc with a 6.82 percent drop to N4.01, and C & I Leasing Plc, which fell by 6.25 percent to N3.00.

In terms of trading volume, Universal Insurance recorded the highest activity with 61.52 million traded shares. AIICO Insurance followed with 31.72 million shares, and United Bank for Africa (UBA) saw 25.85 million shares traded.

Sectoral performance was mixed, with three out of the five tracked indices closing in the red. The NGX Consumer Goods index fell by 0.34 percent, NGX Oil/Gas by 0.03 percent, and NGX Industrial Goods by 0.01 percent.

However, the NGX Banking index posted a 0.79 percent increase, driven by share price gains in major banks such as AccessCorp, Zenith, UBA, and GTCO. Additionally, the NGX Insurance index recorded a 1.99 percent gain.

Market activity was robust, with the total volume and value of trades rising by 33.11 percent and 10.86 percent, respectively, amounting to 365.64 trades worth N4.12 billion.

However, the total number of deals decreased by 14.31 percent, totaling 8,665 trades.

This recovery follows a bearish start to the week and month on Monday, where the NGX-ASI fell by 0.4 percent to 100,020.83 points due to sell pressure on major stocks such as Zenith Bank, UBA, and Nigerian Breweries.

The positive performance of insurance and banking stocks played a crucial role in reversing the market’s fortunes.

Investors remain hopeful that this upward trend will continue, bolstered by strong performances in these sectors.

The Nigerian equities market began the month of July on a slightly negative note with the All Share Index (ASI) dipping by 0.04% at the close of trading on Monday, July 1.

This decrease translated to a loss of approximately N21 billion for investors, a cautious start to the second half of the year.

The Nigerian Exchange Limited (NGX) reported that the ASI and Market Capitalisation fell from the previous trading day’s highs of 100,057.49 points and N56.601 trillion, respectively, to 100,020.83 points and N56.580 trillion.

Meristem research analysts, in their July 1 note to investors, highlighted the possibility of “cautious optimism” in the equities market, driven by renewed investor confidence.

“We anticipate heightened market activity this week as investors and portfolio managers reassess their positions for the second half of the year,” the note read.

The analysts foresee profit-taking on stocks with significant gains, while others might seek to average down their losses by buying underperforming stocks.

In 10,112 deals, investors exchanged 274,682,596 shares worth N3.712 billion. The year-to-date (YtD) return stood lower at 33.76%.

Meristem analysts also noted that corporate actions in the banking sector could spur buying interest throughout the week, potentially driving market activity.

United Capital research analysts echoed a similar sentiment, suggesting a mixed outlook for the equities market.

“Looking ahead, the equities market would be mixed as investors explore opportunistic investment strategies,” they stated.

They anticipate a focus on fundamentally sound stocks and increased market activities due to ongoing bank recapitalizations, second-quarter filings, and expected corporate actions in the coming weeks.

However, they cautioned that elevated interest rates in the fixed income market could negatively impact the equities market.

“Investors may continue to take advantage of high interest rates in the fixed income space,” they noted.

Despite the challenges, analysts from both firms advised fund managers and investors to adopt an opportunistic investment strategy, leveraging market opportunities as they arise.

As the market navigates the complexities of the second half of the year, a strategic and cautious approach will be essential for mitigating risks and maximizing returns.

The total transactions on the Nigerian Stock Exchange surged to N2.35 trillion by the end of May 2024, representing a 115.40% increase compared to the first five months of 2023.

This was disclosed in the domestic and foreign portfolio participation in the equity trading report released by the Nigerian Exchange Limited (NGX) on Thursday.

According to the report, domestic investors maintained their dominance in the market, accounting for N1.79 trillion (79.63%) of the total transactions in the five-month period.

In contrast, foreign investors contributed N458.29 billion (20.37%) to the market.

A further breakdown of the data revealed that domestic institutional investors led the charge with N906 billion in transactions, slightly ahead of domestic retail investors, who recorded N885.19 billion.

The growth in equity trading has been attributed to several critical reforms initiated in the past year.

Since May 2023, Nigeria has undergone a significant leadership change, leading to the implementation of key policies such as foreign exchange market harmonization and the removal of fuel subsidies.

Experts believe these reforms have boosted the capital market and encouraged foreign investors to reconsider their positions in Nigeria.

Also, the Monetary Policy Rate (MPR) has been hiked multiple times, reaching 26.25% at the May 2024 Monetary Policy Committee meeting.

This tightening monetary policy has also influenced the market dynamics, contributing to increased trading activities.

A recent report by PricewaterhouseCoopers (PwC), titled “Navigating Economic Reforms,” highlighted the impressive performance of the Nigerian Stock Exchange.

The report noted an 85.2% increase in market capitalization, from N30.3 trillion in May 2023 to N56.5 trillion in May 2024.

This growth was driven by positive sectoral index performances, particularly in the oil and gas (124%), consumer goods (104%), insurance (88%), and banking (69%) sectors.

The Nigeria 10-Year Government Bond Yield also reached an all-time high of 19.30% in May 2024, up from 14.55% in May 2023.

This increase in bond yields is attributed to the attractive rates on Open Market Operations (OMO) and Treasury Bills, spurred by the rise in the MPR.

Month-on-month data from NGX showed that total transactions rose from N346.23 billion in April to N355.38 billion in May, reflecting a 2.64% increase.

Domestic investors played a pivotal role in driving this increased activity, with their participation rising by 2.53% from N225.40 billion in April 2024 to N231.10 billion in May 2024.

Within this period, institutional investors outperformed retail investors by a margin of two percent, recording N117.57 billion compared to N113.53 billion.

Meanwhile, total foreign transactions also saw an increase, rising by 2.86% from N120.83 billion in April to N124.28 billion in May 2024.

This uptick in foreign participation is a positive signal, indicating a gradual return of international investors to the Nigerian market.

The sustained growth in equity trading and the dominance of domestic investors underscore the resilience and potential of the Nigerian stock market.

With ongoing reforms and a more stable economic environment, the outlook for the local bourse remains positive, promising further growth and opportunities for both domestic and foreign investors.