Onome Amuge
The Nigerian equities market extended its bullish run on Wednesday, with investors gaining a N643 billion in a single trading session. The stellar performance, which pushed the market’s total capitalisation to N92.2 trillion, marks the 25th consecutive day of gains for the local bourse, cementing its position as one of the best-performing markets globally this year.
The benchmark All-Share Index (ASI) gained 1,017.49 basis points, closing the day at 145,813.86 points, a notable jump from the previous day’s 144,796.37. This growth was driven by a broad-based rally, as evidenced by a positive market breadth where 53 stocks advanced against only 26 decliners, with 67 stocks remaining unchanged. While the market’s ascent was fuelled by a range of factors, including continued bargain hunting and a rotation of funds from the fixed-income market, the day’s standout performance was led by an unprecedented rise in the insurance sector and the spectacular gains of companies like SCOA Nigeria and Jaiz Bank.
Among the numerous stocks that saw gains, Scoa Nigeria and Jaiz Bank Plc emerged as two of the day’s most prominent winners, each recording a maximum price appreciation of 10 per cent.
Scoa Nigeria, an industrial conglomerate with a diverse portfolio spanning sectors from vehicle assembly to infrastructure and logistics, saw its share price climb from N5.00 to N5.50 per share. The company’s impressive gain reflects a broader trend of investor interest in stocks with a strong historical footprint that may be poised for a turnaround. For years, SCOA Nigeria has been seen as a legacy player, but with the Nigerian economy showing signs of resilience and a renewed focus on industrialisation, savvy investors are increasingly betting on established brands with the potential for significant growth. The company’s robust performance on Wednesday suggests that despite recent market quietude, it remains a viable prospect for those seeking to capitalise on Nigeria’s long-term economic narrative. The gain could also be tied to anticipatory buying ahead of potential corporate announcements or a re-evaluation of its asset base, positioning it as an attractive value play.
In a similar vein of maximum gain, Jaiz Bank Plc, Nigeria’s leading non-interest (Islamic) financial institution, saw its share value rise from N4.30 to N4.73 per share, also a 10 per cent increase. As the pioneer of non-interest banking in the country, Jaiz Bank has carved out a unique niche, appealing to a demographic of investors and depositors who seek Sharia-compliant financial services. The bank’s stellar performance on Wednesday can be attributed to several factors, including its strong fundamentals, consistent growth in its customer base, and a general market appreciation for its business model. Its gain also reflects a broader understanding among investors that non-interest banking is not just a niche market but a rapidly expanding segment with a strong focus on ethical and transparent financial practices.
The market’s overall momentum was far from a random event. The day’s trading data revealed a significant rotation of capital, with the insurance sector taking centre stage in an unusual and powerful rally. The insurance index rose 9.87 per cent, a move that stockbrokers attributed to renewed investor optimism following recent reforms in the industry. The passing of a new insurance reform bill has injected a wave of confidence into the sector, suggesting its steep undervaluation may be a thing of the past. Companies like MANSARD and NEM Insurance were at the forefront of this surge, both appreciating by 10 per cent and 9.87 per cent respectively, underscoring the market’s rapid response to a fundamental shift in regulatory and operational environments.
This sectoral rotation was not limited to insurance. The Industrial Goods index also posted a gain of 2.85 per cent, driven by strong buying interest in heavyweights like BUACEMENT. Similarly, the Oil and Gas index climbed by 0.96 per cent, largely buoyed by the performance of stocks such as OANDO.
On the flip side, the Banking (-0.36%) and Consumer Goods (-0.41%) indices closed in the red, pressured by declines in key stocks like ZENITHBANK and INTBREW.
Trading activity on Wednesday was brisk, with a significant increase in both volume and value compared to the previous day. A total of 2.69 billion shares worth N32.63 billion were traded in 35,137 deals, marking an increase from the 1.02 billion shares traded for N22.83 billion on Tuesday.
Consolidated Hallmark Holdings led the activity chart in terms of volume, with 1.01 billion shares changing hands, followed by Linkage Assurance and Sterling Financial Holdings Company. In terms of value, Zenith Bank was the most traded stock, accounting for 15.15 per cent of the total value of trades, despite its slight price depreciation.
Outlook and investor sentiment
The market’s year-to-date (YTD) return now stands at 41.67 per cent, a testament to the strong performance since the beginning of the year. The positive investor sentiment, as highlighted by the market breadth, remains broadly upbeat, with traders actively seeking out fundamentally strong companies.
The rally shows no signs of fizzling out, with analysts pointing to upcoming corporate earnings releases and dividend announcements as potential catalysts that could sustain the momentum in the weeks to come.
