The Nigerian stock market recorded a strong rebound last week as investors’ portfolio value rose by more than N986 billion within five trading sessions. The development marked the end of a four-week losing streak and signalled renewed investor confidence in equities.
The Nigerian Exchange Limited (NGX) All Share Index (ASI), the major performance indicator of the market, closed positive in four out of the five trading sessions, pushing the index higher by 1.2 percent week-on-week to settle at 140,545.69 points. The rally was driven by gains in key blue-chip stocks, including Lafarge Africa Plc (WAPCO), which appreciated by 13.3 percent, Zenith Bank Plc, up 4.8 percent, United Bank for Africa (UBA), which rose by 4.2 percent, and Dangote Sugar Refinery, which gained 9.1 percent.
Market capitalisation, which measures the total value of listed equities, climbed to N88.922 trillion at the close of the week, up from N87.936 trillion the previous week. This reflects the over N986 billion increase in investors’ wealth during the period.
Analysts noted that the renewed positive sentiment in the market was largely due to bargain hunting, as investors took positions in fundamentally strong stocks trading at attractive entry points.
The week’s rebound also lifted the Month-to-Date (MtD) return to 0.3 percent, while the Year-to-Date (YtD) return improved to 36.7 percent, highlighting the resilience of the equities market despite earlier profit-taking pressures.
In terms of trading activity, however, both volume and value declined. Market turnover showed that the volume of shares traded dropped by 37.7 percent week-on-week, while the value of transactions declined by 39.5 percent. This indicates that while the market gained in value, trading was relatively less active compared to the previous week.
Sectoral performance was broadly positive across key indices. The Oil and Gas Index advanced by 2.4 percent, Insurance Index rose by 2.4 percent, Banking Index increased by 1.7 percent, Industrial Goods Index gained 1.1 percent, while the Consumer Goods Index appreciated by 1.0 percent. These broad-based gains reflected a renewed appetite for equities across diverse sectors of the market.
Analysts at InvestData Consulting Limited said the outlook for the market in the new week remains mixed, as investors continue to adjust their portfolios in anticipation of more third-quarter earnings results. “Bargain hunters are likely to take advantage of price pullbacks in fundamentally strong stocks, even as profit-taking persists in a few large-cap counters,” the firm stated.
They added that the direction of the market will depend largely on the strength of upcoming earnings reports, macroeconomic indicators, and developments in global crude oil prices, which continue to play a key role in shaping investor sentiment in Nigeria.
Similarly, Cordros Capital analysts advised investors to remain cautious, noting that portfolio flows are likely to tilt towards fundamentally justified stocks offering compelling entry opportunities.
Market watchers are also turning attention to the release of the August inflation report. Analysts believe that evidence of sustained disinflation could reinforce expectations of a possible rate cut by the Monetary Policy Committee (MPC) later this month. A rate cut could provide additional support for equities by easing borrowing costs for businesses and boosting investor confidence.
Overall, the performance of the market last week highlights the opportunities available for both local and foreign investors in Nigeria’s capital market, especially as companies begin to release their third-quarter results. With the Year-to-Date return already at 36.7 percent, analysts expect the equities market to remain a key destination for investors seeking higher returns compared to other asset classes.
