By Chinenye Anuforo and Chinwendu Obienyi
Investors on Nigerian stock market last month gained N901 billion as the two major indicators, All-Share Index and Market Capitalisation of traded equities closed in green zone.
Specifically, All-Share Index for the month of July gained 2,730.27 points to close at 35,847.75 after touching a high of 37,655.46 and low of 32,149.69 within the month from the 33,117.48 at which it opened, representing about 8.24 per cent growth over the period on a strong buy-market position that impacted on stock prices to hit a new three-year high within the month. In the same vein, the market capitalisation garnered N901 billion representing an 8.24 per cent increase from N11.452 trillion it opened the month’s business to close at N12.353 trillion.
Market analysts attribute the positive close to the increasing confidence of foreign and domestic investors on the strength of improving economic and market fundamentals that were majorly driven by the sustained intervention of the Central Bank of Nigeria (CBN) in the nation’s foreign exchange market. In particular, the creation of FX products such as the import and export, Small and Medium-scale Enterprises windows, among others that had helped to relatively support the continued appreciation of the Naira, while ensuring a stable exchange rate were recognised in the new wave of stock rally.
During the period under review, out of the 21 trading sessions of the month, the market was up for 16 trading sessions and down in just five, wiping away two-year loss position, and resulting in a year-to-date gain of 33.40 per cent. The unprecedented improvement in the listed companies’ fundamentals and the economic recovery made the equities attractive even as many remained undervalued with high margin of safety.
The buying volume of total transactions for the month was 67 per cent, while selling position was 33 per cent to continue the five months of bull-run, while volume index for the period was 1.00. Traded volume for the month was down by 37 per cent 6.58bn shares from 10.45 billion in the preceding month.
The NSE Banking and Industrial indices drove the market the most in the month under review. While the banking index gained 11.50 per cent, its industrial counterpart was up 11.49 per cent as they outperformed the composite index NSEASI during the period, followed by the NSE Premium which rose by 9.66 per cent to reflect the high tempo of activities in Zenith, FBNH and Dangote Cement. This was followed by the NSE Lotus index, which moved 9.07 per cent up, to reveal investors’ interest in blue-chip stocks, amidst their low Price-To-Earnings attraction in the sector. Other sectors that closed up during the month were: the NSE Consumer Goods, NSE Main Board, NSE 30, NSE 50, NSE Insurance and NSE Oil/Gas. The NSE Asem, was the only sector that closed in the red, shedding 1.09 per cent to reflect investors and traders low confidence in small listed companies.
The month’s best performing stocks were Okomu Oil, which rallied on the strength of strong numbers and general bulls’ market, gaining 36.83 per cent of its opening price; followed by Dangote Sugar, which appreciated by 33 per cent; while insurance company- NEM chalked all of 27.62 per cent; and Honeywell Flour, 25 per cent.
Low, medium and high cap stocks among the top gainers for the month included: Forte Oil with 23.23 per cent; C&I Leasing, 20.57 per cent, Continental Reinsurance, 20.17 per cent, ETI, 18.11 per cent and Zenith Bank, 17.81 per cent among others.