Banking Sector Drives NGX Market Capitalization to N55.978 Trillion

The Nigerian Exchange Limited (NGX) appreciated last week as market capitalization closed at N55.978 trillion.

This growth, amounting to a gain of N481 billion, was primarily driven by renewed investor interest in the banking sector.

The NGX Banking Index led the charge, appreciating by 5.14 percent week-on-week. This surge was fueled by several key developments in the financial sector, including the Central Bank of Nigeria’s approval of the merger between Unity Bank and Providus Bank.

Also, the reintroduction of the retail Dutch auction system (rDAS) in the foreign exchange market for authorized dealer banks further bolstered investor confidence.

As a result of these positive indicators, the NGX All-Share Index (ASI) appreciated by 0.87 percent on a weekly basis, closing at 98,592.12 basis points.

The year-to-date return of the NGX ASI stood at an impressive 31.9 percent as of August 9, 2024, reflecting sustained growth in the equities market.

A sectoral analysis of last week’s performance revealed gains across most sectors. The NGX Consumer Goods, Insurance, and Oil & Gas indices recorded increases of 2.35 percent, 1.79 percent, and 0.97 percent, respectively.

However, the NGX Industrial Index retreated by 3.67 percent, marking the only significant decline among the major sectors.

Market breadth for the week was positive, with 46 equities appreciating in price, 38 depreciating, and 67 remaining unchanged.

Among the top gainers was Oando, which saw its share price jump by 60.47 percent to close at N40.60 per share.

R T Briscoe followed closely with a 51.19 percent increase, closing at N1.27 per share, while Japaul Gold & Ventures climbed by 35.80 percent to N2.39 per share.

On the flip side, Champion Breweries led the decliners, dropping 15.03 percent to close at N2.77 per share. BUA Cement and University Press also saw declines, falling by 9.99 percent and 9.92 percent, respectively.

Overall, a total turnover of 2.679 billion shares worth N49.017 billion was traded last week across 47,451 deals.

The Financial Services Industry dominated trading activities, contributing 74.00 percent and 65.25 percent to the total equity turnover volume and value, respectively.

The Oil and Gas Industry followed, with a turnover of 229.680 million shares worth N7.441 billion in 4,021 deals.

Analysts anticipate that the uptrend in the equities market will continue into the new week, driven by increasing buying interest from investors.

The ongoing dividend earning season is also expected to sustain positive sentiment among market participants, particularly as major banks prepare to release their half-year earnings reports.

Ambrose Omordion, Chief Operating Officer of InvestData Consulting Limited, expressed optimism about the market’s future performance.

“We expect a continued trend of mixed sentiment on increased volatility, profit-taking, and sector rotation. Investors are advised to take advantage of any price corrections to buy into fundamentally sound stocks,” he said.