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.

At the 59th Annual General Meeting (AGM) of Chemical and Allied Products Plc (CAP), shareholders approved a final dividend of N1.55 kobo per 50 kobo ordinary share, bringing the total dividend declared for the 2023 financial year to a significant N1.26 billion.

The AGM, held recently in Lagos, highlighted the company’s financial performance and strategic initiatives that have driven its success.

Reviewing the company’s performance, CAP reported a 24% increase in revenue to N23.9 billion, up from N19.2 billion in 2022.

Board Chairman Mr. Folasope Aiyesimoju attributed the growth to the dedicated efforts of the team, loyal customers, and resilient business strategies.

He noted that the company’s gross profit rose by 18% to N9 billion, while profit before tax increased by 10% to N3.8 billion.

CAP’s Managing Director, Mrs. Bolarin Okunowo, addressed the shareholders, highlighting the company’s financial achievements despite challenging economic conditions.

“Our exceptional results in 2023 underscore our resilience and adaptability in navigating macroeconomic headwinds. These achievements are a testament to the strength of our team and business model,” she said.

The profit for the year saw a 6% increase to N2.5 billion with earnings per share rising to 309 kobo.

Looking ahead, Mrs. Okunowo outlined CAP’s strategic plans for future growth.

She said “We plan to aggressively increase our retail footprint in Nigeria while deepening our strategic partnerships and alliances. Our focus will be on expanding our market share across the decorative and industrial coatings segments.”

Mrs. Okunowo said the company is committed to delivering high-quality products and leveraging technology to drive growth and profitability.

“The positive macroeconomic outlook for 2024 provides a platform for CAP to expand its horizons and embrace growth.”

Shareholders at the AGM expressed satisfaction with the company’s performance and the board’s strategic direction. They commended the distribution of dividends and the commitment to sustaining shareholder value.

The meeting concluded with the re-election of Mr. Folasope Aiyesimoju and Dr. Vitus Ezinwa as Directors retiring by rotation, and the approval of Mr. Debola Badejo as a new Director.

With renewed optimism and confidence in its strategic direction, CAP remains committed to creating long-term value for stakeholders through innovation, operational excellence, and a customer-centric approach.

The company looks forward to another year of remarkable achievements and sustained growth.

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.