…Wema Bank, UACN drive rally
The Nigerian equities market concluded Thursday’s trading session on a strong upward trajectory, adding N370 billion to investors’ portfolios and extending its bullish momentum into the final session of July. The strong performance saw the benchmark All-Share Index (ASI) rise by 0.42 per cent to close at 139,863.52 points, a new high that lifted the year-to-date (YTD) return to 35.89 per cent.
The market capitalisation of the Nigerian Exchange (NGX) gained N364.55 billion, settling at a new record of N88.42 trillion, buoyed by a combination of sustained investor optimism and strong demand for key risk assets.
Despite the overall market strength and positive momentum, investor sentiment for the day was nuanced, reflecting a blend of opportunistic bargain hunting and strategic profit-taking. The market breadth, a key indicator of market sentiment, closed in negative territory, with 54 stocks declining while only 28 stocks advanced. The upward movement of the overall market was largely driven by a handful of influential stocks, which successfully outweighed the broader retreat.
Leading the day’s advancers were Wema Bank Plc and UAC of Nigeria (UACN), both of which saw their share prices appreciate by the maximum allowable 10.00 per cent. Wema Bank’s stock closed at N22.00, a leap from its previous close of N20.00. This rally in the banking stock is likely tied to continued investor confidence in the financial sector, which has recently showcased strong performance and resilience. The bank’s strong gains for the day underscore a market belief in its strategic direction and financial outlook, following a period of strong earnings reports. The banking sector as a whole closed the day in the green, gaining 0.08 per cent, further reinforcing this positive sentiment.
Similarly, UACN’s share price surged by 10.00 per cent to close at N80.30, up from N73.00. As a major Nigerian conglomerate with a diversified portfolio spanning various sectors including real estate, food, and manufacturing, its strong performance reflects a positive outlook on its business operations. The gain also highlights a targeted buying interest in stocks with diversified revenue streams that are perceived to be well-positioned for future growth.
Following closely behind the top two was Guinness Nigeria Plc, which recorded a 9.96 per cent gain, closing the day at N117.05 per share. The momentum in these key stocks was a primary catalyst for the day’s market-wide gain, showcasing how concentrated buying in a few large-cap names can disproportionately influence overall market performance.
A notable trend observed during the session was the divergence between trading volume and value. While the total volume of all trades executed increased 20.97 per cent, the total value of these trades actually declined by 3.92 per cent. This pattern suggests that a higher proportion of transactions were concentrated in lower-priced stocks, a phenomenon often associated with speculative activity, while trading in higher-value equities may have been more subdued or subject to profit-taking.
In terms of market activity, First City Monument Bank (FCMB) led the volume chart, accounting for 11.05 per cent of the total volume of trades with 121 million shares transacted. It was followed by Universal Insurance Plc, which contributed 8.32 per cent of the total volume. Other highly traded stocks by volume included Fidelity Bank Plc, REGALINS, and ROYALEX, which rounded out the top five.
On the other hand, the value chart was dominated by higher-priced stocks. Lafarge Africa Plc (WAPCO) emerged as the most traded stock by value, with equities worth N3.5 billion changing hands, accounting for 10.72 per cent of the total value transacted on the exchange. This was followed by Dangote Cement Plc and MTN Nigeria (MTNN), with executed trades valued at N2.8 billion each.
The day’s market breadth, despite being negative overall, did not reflect a uniform retreat across all sectors. Sectoral performance was largely positive, with four out of the six tracked sectors closing in the green. The Industrial Goods sector led the way with a gain of 1.35 per cent, followed by the Oil & Gas sector, which gained 0.94 per cent. The Banking sector and the Commodities sector also posted marginal gains of 0.08 per cent and 0.52 per cent, respectively. This positive sectoral performance, particularly in key economic drivers like Industrial Goods and Oil & Gas, suggests a fundamental underpinning to the market’s rally, rather than a purely speculative move.
On the flipside, the Insurance and Consumer Goods sectors faced headwinds, declining by 4.31 per cent and 0.02%, respectively. This sectoral dip highlights the mixed sentiment within the market, where investors were quick to take profits in certain segments. The list of top decliners included several insurance stocks, such as AXA Mansard Insurance (-10.00%), and others like Learn Africa Plc (-10.00%) and FTN Cocoa Processors (-10.00%), which all suffered maximum price drops for the day.
