Positive outlook for Nigerian stocks in May as month opens with N13.8bn gain

By Adesola Afolabi

There exist ample room for Nigerian investors on the equities segment of the Nigerian Stock Exchange (NSE) to re-coup previous month’s loses in May, says market research analysts.

The month of May began on a positive note as the NSE All Share Index (ASI) inched higher for the third consecutive session by 0.09 percent to 41,306.02 points, following interest in value stocks, as well as positive reaction to corporate earnings.

Market capitalisation also inched closer to the N15 trillion mark to close at N14.962 trillion as investors gained N13.8 billion.

Analysts at Cordros Capital, in an investor’s note Wednesday, noted that positive macroeconomic fundamentals suggest legroom for gains to existing.

“We retain our positive outlook for risky assets, and look for the extension of gains on the exchange,” they said.

Trading activities on Wednesday were positive on the backdrop of gains in the oil & gas index, which recorded the highest gain of 1.22 percent, driven by demand for the shares of MOBIL that gained 9.55 percent.

The gains in the share price of Mobil were consequent on an impressive first quarter result, which showed significant improvement in top and bottom line performances.

Mobil now known as 11 Plc. recorded a 79.1 percent year on year increase in revenue to N45.08 billion and a profit increase of 21,005.6 percent to N2.76 billion.

The banking and industrial goods indices followed suit with an increase of 0.63 percent and 0.31 percent respectively as UBA (+1.30%) and DANGCEM (+0.77%) recorded gains.

On the flip side, the consumer goods and insurance indices declined 1.09 percent and 0.59 percent, owing to profit-taking in DANGFLOUR (-9.40%), and WAPIC (-3.64%) stocks, respectively.

Wednesday’s performance led to an improvement in year-to-date gain, which climbed 8.1 percent.

Market breadth remained positive, with 23 gainers and 15 losers, led by MOBIL (+9.55%) and DANGFLOUR (-9.40%), respectively. Total volume of trade decreased by 38.68 percent to 276 million units, while value of trades was 38.95 percent higher, at NGN6.89 billion, and exchanged in 5,327 deals.

Following the day’s performance, investment researchers at Afrinvest, maintain a bullish medium term outlook as attractive entry opportunities continue surface in the market.