Onome Amuge
Nigeria’s equity market continued its impressive bullish run, with the benchmark All-Share Index (ASI) reaching a new peak on Tuesday, as investors poured into the market, pushing its year-to-date return to over 40 per cent. The rally, which has been described by some analysts as a monster, saw the Nigerian Exchange (NGX) add another N459 billion in market capitalisation, largely driven by gains in the industrial and insurance sectors.
The sustained optimism is underpinned by a growing rotation of capital from the fixed-income market into equities. According to market watchers, investors are increasingly attracted by the promise of strong returns and the deluge of strong corporate earnings reports and interim dividend announcements from major blue-chip companies. This trend indicates a fundamental shift in investor confidence, with capital now chasing growth and value in the stock market rather than the recently less attractive returns offered by government securities.
The ASI advanced by 0.64 per cent to close at 144,796.37 points, marking a 724.59 basis point increase from the previous day. This upward trajectory propelled the total market capitalisation to N91.60 trillion, a substantial gain from the N91.14 trillion recorded on Monday. The market’s positive momentum was further highlighted by an increase in trading activity, with total volume and value of transactions rising by 24.13 per cent and 14.29 per cent respectively. A total of 1.02 billion shares, valued at N22.83 billion, were traded in 38,932 deals, signaling strong liquidity and broad-based investor participation.
The day’s stellar performance was heavily influenced by the exceptional showings of a few key stocks. Among the leading gainers, BUA Cement Plc and AIICO Insurance Plc stood out, each recording a maximum price appreciation of 10 per cent, a clear signal of strong investor conviction in their respective sectors.
BUA Cement, one of Nigeria’s largest cement producers, was a primary driver of the industrial sector’s robust performance, which closed the day with a gain of 3.35 per cent. The company’s share price rose N15.50, closing at N170.50 per share from its opening price of N155.00. This rally is indicative of the market’s positive outlook on the industrial giant’s operational strength and its strategic positioning within Nigeria’s infrastructure development landscape. The ongoing government focus on large-scale public works, road construction, and housing projects has created a conducive environment for cement manufacturers. Investors are betting on BUA Cement’s ability to capitalise on this heightened demand, expand its market share, and deliver strong earnings in the coming quarters. The company’s recent expansion projects and cost-management strategies are also likely contributing to its appeal, positioning it as a key beneficiary of a growing economy.
Meanwhile, in the financial services space, AIICO Insurance Plc was the most traded stock by volume, with 97.10 million shares changing hands, and its stock price also appreciated by the maximum 10 per cent. The insurance firm’s share value grew by N0.24, closing at N2.64 from N2.40 per share. This significant leap underpinned the insurance sector’s outstanding performance, which led all sectors with a 7.51 per cent gain. The interest in AIICO reflects a broader sentiment that the Nigerian insurance sector is poised for a breakout. As the country’s middle class expands and regulatory reforms strengthen the industry, investors are seeking out well-capitalised and strategically positioned firms like AIICO to tap into this potential growth. The company’s strong financial results, coupled with a renewed focus on digital distribution channels and product innovation, appear to be winning over investors who see an upside in a traditionally underpenetrated market.
The bullish sentiment was widespread, with most sectors closing in the green. The Industrial Goods sector, buoyed by the performance of BUA Cement and Nigerian Enamelware Plc (+10%), was a major contributor to the day’s gains. The Oil & Gas sector also saw a positive close, gaining 0.91 per cent, driven by price appreciation in stocks like Oando. The Commodity sector also posted a gain of 0.20 per cent, further showcasing the diverse nature of the market rally.
However, not all sectors shared in the gains. The Banking sector closed in the red, with an average decline of 0.86 per cent, and the Consumer Goods sector also ended the day down by 0.43 per cent. The retreat in banking stocks could be attributed to a number of factors, including profit-taking after recent gains and ongoing regulatory concerns, such as the CBN’s suspension of dividend payments for some institutions still under its forbearance framework. In the consumer goods space, companies are likely facing headwinds from persistent inflationary pressures and a recent slowdown in consumer purchasing power.
Market breadth remained positive, with 52 stocks advancing against 21 that declined, and 73 remaining unchanged. Among the other notable gainers were Neimeth, Enamelwa, and Mutual Benefit, which all gained 10 per cent.
On the flipside, LivingTrust emerged the top loser, with its share price depreciating by 9.86 per cent. Other notable decliners included Cadbury, which fell by 7.35 per cent, and Mecure, which lost 9.20 per cent.
The impressive market activity was also reflected in the list of most-traded equities. While AIICO led in volume, GTCO emerged as the most traded stock in value terms, accounting for 17.22 per cent of the total value traded on the exchange.
The Nigerian equity market’s latest performance is considered a strong testament to its resilience and growing appeal. The sustained rally is being fueled by a cocktail of strong corporate earnings, attractive dividend yields, and a strategic rotation of funds from the less lucrative fixed-income market. According to analysts, the bullish sentiment, particularly in the industrial and insurance sectors, indicates that investors are optimistic about Nigeria’s economic prospects and are willing to take on more risk in search of higher returns. As long as these fundamental drivers hold firm, analysts predict the market’s upward trajectory could continue, albeit with the possibility of intermittent corrections.
