Nigerian Stock Market Opens Week on a Negative Note

The Nigerian stock market began the last trading week of June 2024 on a negative trajectory as profit-taking activities in Airtel Africa Plc (-2.5%) and 25 other stocks led to a substantial decline in the overall market capitalization, which fell by N707 billion.

Market Performance

The Nigerian Exchange Limited All-Share Index (NGX ASI) dropped by 438.93 basis points, or 0.44%, closing at 99,304.12 basis points. Market capitalization also decreased by N249 billion, ending at N56.175 trillion.

Sectoral Analysis

The sectoral performance was mixed:

  • NGX Banking Index: Decreased by 1%
  • NGX Consumer Goods Index: Decreased by 0.4%
  • NGX Industrial Goods Index: Decreased by 0.2%
  • NGX Oil & Gas Index: Closed flat
  • NGX Insurance Index: Increased by 1.1%, the only sectoral gainer of the day

Market Breadth and Sentiment

Market sentiment was negative, with 20 stocks gaining and 26 losing. Secure Electronic Technology emerged as the highest price gainer, rising by 10% to close at 55 kobo per share. VFD Group followed with a 9.85% increase to close at N44.60, while John Holt advanced by 9.58% to close at N2.86 per share. Other notable gainers included Thomas Wyatt Nigeria (+9.52%) and Transcorp Hotels (+9.33%).

Conversely, International Breweries led the losers’ chart with a 10% drop to close at N3.96 per share. Deap Capital Management and Trust declined by 8.93% to close at 51 kobo, while DAAR Communications fell by 8.77% to close at 52 kobo per share. Other significant losers were Beta Glass (-8.62%) and Oando (-7.36%).

Trading Volume and Activity

The total volume of traded shares increased by 57.74% to 973.623 million units, valued at N19.315 billion, across 9,941 deals. The shares of FBNH led the trading activity with 627.604 million shares worth N13.452 billion. Beta Glass followed with 35.698 million shares valued at N1.892 billion, while Veritas Kapital Assurance traded 35.344 million shares worth N33.472 million. Other active stocks included Chams Holding Company (26.152 million shares worth N60.269 million) and AIICO Insurance (24.299 million shares worth N23.238 million).

Analysts’ Outlook

Analysts at United Capital Plc anticipate that the fixed income market will continue to deter broader investments in equities. Investors are likely to focus on opportunistic investments in fundamentally sound and undervalued stocks, as well as those with recent corporate actions such as mergers and acquisitions (M&As).

They expect bargain hunting to persist, with some investors preparing for a potential moderation in monetary policy in the second half of 2024, particularly in the third quarter. This anticipation is partly based on the high base effect expected for inflation in June 2024.

Overall, fund managers and investors may continue to adopt an opportunistic investment strategy, trading market volatility and investing in undervalued equities. This approach is likely to dominate the market activities as they navigate the current economic landscape.

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