Onome Amuge
The Nigerian equities market closed the just-ended trading week on a bullish note, with investors gaining a total of N1.1 trillion as market capitalisation climbed to N91.1 trillion. While headlines have largely focused on the sheer scale of gains, a deeper look reveals a shift in market dynamics, marked by stronger retail participation, sectoral rotations, and cautious but deliberate positioning by investors ahead of the third-quarter earnings season.
Unlike many previous rallies driven by heavy block trades and institutional dominance, the week’s activity pointed to a growing contribution from retail and mid-tier investors. Market turnover by volume rose 9.35 per cent to 8.40 billion units despite a 76.6 per cent decline in value traded to N115.5 billion.
The financial services industry dominated the activity chart, contributing over 92 per cent of total volume traded. Shares of Cornerstone Insurance, Fidelity Bank, and United Bank for Africa led the pack, accounting for 77.7 per cent of total volumes. The prominence of these counters reflects growing interest from retail investors, who have increasingly leaned toward mid-tier banks and insurers with low share prices and relatively strong fundamentals.
Beyond retail-driven activity, sectoral performance highlighted a wave of portfolio rebalancing. Oil & Gas led the week with a 5.68 per cent rally, boosted by renewed buying interest in Eterna Plc, which surged 32.8%. Commodities followed with 2.94 per cent, as investors repositioned in PZ Cussons and Nigerian Enamelware, both gaining over 20 per cent.
The industrial goods index rose 1.66 per cent, while banking stocks advanced 1.17 per cent, reflecting selective positioning ahead of Q3 earnings. Consumer goods eked out modest gains at 0.13 per cent, while insurance emerged as the sole laggard, slipping 2.02 per cent as profit-taking in recent high-fliers dampened sentiment.
The breadth of the market remained healthy, with 53 gainers against 43 losers, compared to 32 gainers and 51 losers the previous week. This improvement indicates that despite profit-taking in select names like Julius Berger, International Energy Insurance, and Union Dicon Salt, investor confidence remains broadly positive.
The All-Share Index closed at 143,584.04 points, up 1.02 per cent from the previous week’s 142,133.03 points, translating to a year-to-date return of 39.5 per cent. Analysts say the sustained bullish trend reflects resilience in the face of macroeconomic headwinds, including persistent inflationary pressures and cautious monetary policy tightening.
Part of the N1.1 trillion gain was amplified by the listing of 14.14 billion ordinary shares of Wema Bank Plc on September 30, which boosted market capitalisation by N1.18 trillion. The listing highlighted the increasing role of primary market activity in driving headline market metrics. While the value accretion did not stem entirely from secondary market trading, it added momentum to the bullish narrative.
Though market sentiment stayed positive, trading activity was mixed. The number of deals declined slightly to 115,801 from 116,645 the previous week, highlighting intermittent caution among investors.
This changing composition of activity has implications for market depth. Analysts caution that while retail flows can sustain momentum in the short term, they also introduce volatility, as smaller investors are more likely to engage in quick profit-taking.
Top gainers included Eterna Plc (+32.8%), Nigerian Enamelware (+20.9%), and PZ Cussons (+20.9%). On the flip side, Julius Berger shed 17.8 per cent as investors booked profits following earlier rallies, while International Energy Insurance and Union Dicon Salt both declined by over 10 per cent.
The divergence between top gainers and losers underscores selective investor appetite, with capital chasing stocks expected to deliver stronger earnings, while weaker counters saw confidence erode.
Looking ahead, analysts anticipate the bullish momentum will persist, though tempered by intermittent bouts of profit-taking. Cowry Research noted that the positive year-to-date performance, broad-based sectoral gains, and rising retail participation provide a stable backdrop for further growth.
“Although intermittent profit-taking and fewer block trades could result in mixed activity, the robust year-to-date performance, broad-based sectoral gains, and rising retail participation continue to underpin market stability. Meanwhile, we continue to advise investors to position in stocks with strong fundamentals and earning power,” the firm stated.
