Onome Amuge

Nigeria’s equities market opened the week on a bullish note, with the All-Share Index (ASI) advancing by 0.07 per cent to settle at 144,722.47 points. The positive momentum reversed the previous week’s losses and pushed the year-to-date return to 40.61 per cent, signaling a renewed, albeit cautious, optimism among investors. Market capitalisation gained N59.64 billion, closing the trading day at N91.56 trillion.

The rally was broad-based, with market sentiment leaning positive as 43 stocks appreciated against 26 that depreciated, reflecting a healthy market breadth. While the overall index gain was modest, the performance of specific sectors and high-value stocks points to a more nuanced story of targeted investment returning to the market.

The day’s gains were not uniform across all sectors, highlighting a key divergence in investor appetite. The insurance sector emerged as the day’s star performer, rising by 5.26 per cent. This healthy growth was complemented by gains in the Industrial and Consumer Goods sectors, which advanced by 1.75 per cent and 1.15 per cent respectively. Conversely, the banking and oil & gas sectors experienced a decline, falling by 1.51 per cent and 0.28 per cent, respectively, pulling against the market’s upward momentum.

Trading activity presented a mixed picture, indicating a change in the nature of investor engagement. The total volume of trades decreased by 16.12 per cent to 1.15 billion units, but this was offset by a 17.55 per cent rise in the total value of transactions, which reached N16.17 billion across 38,160 deals. This dynamic indicates that while there were fewer trades, they involved larger, more valuable stock blocks, a pattern often seen when institutional or high-net-worth investors make targeted movements.

The activity chart reflected this trend. Universal Insurance (UNIVINSURE), Linkage Assurance (LINKASSURE), and Lasaco Assurance (LASACO) led the volume chart, accounting for a significant portion of the total volume and underscoring the high interest in insurance stocks. Guaranty Trust Holding Company (GTCO) emerged as the most traded stock in value terms, capturing 6.96 per cent of the total value of all transactions for the day.

At the forefront of Monday’s bullish run were UPDC Plc and AIICO Insurance Plc, both of which topped the advancers’ chart with the maximum possible daily price appreciation of 10.00 per cent. Their performance not only drove their respective sectors but also served as a bellwether for the broader market’s sentiment.

UPDC Plc, a prominent player in the real estate sector, saw its shares climb to the highest level on the day. While no specific corporate announcement accompanied the increase, market analysts point to a renewed investor interest in real estate assets. The company, which holds major property assets and manages real estate trusts, is seen by some investors as a potential beneficiary of a more stable macroeconomic environment. The rally in its stock indicates that capital is flowing into tangible assets, as investors look for value beyond traditional liquid instruments. Analysts noted that this move may also be driven by speculation that the company is on the cusp of an operational or strategic breakthrough that will unlock its asset value. 

AIICO Insurance Plc, meanwhile, was a primary beneficiary of the day’s robust sectoral performance. The company’s 10.00 per cent price appreciation was a direct reflection of the broader rally in the insurance segment, which was the best-performing sector by a significant margin. 

The strong performance of insurance stocks, including Cornerstone Insurance (+9.99%) and Custodian Investment (+9.93%), reflects a collective reassessment of the sector’s valuation by investors. The sector’s long-standing undervaluation, coupled with expectations of a favourable regulatory environment and stronger underwriting performance, appears to be attracting significant capital inflows. For AIICO, one of Nigeria’s largest insurers with a diversified portfolio spanning life, general, and health insurance, the rally indicates investor confidence in its market position and potential for future earnings growth.

The market’s performance on Monday, with key stocks like UPDC and AIICO leading the charge, shows that while volatility persists, investors are actively seeking opportunities to enter the market. The divergence in sectoral performance indicates that the market is becoming increasingly discerning, with capital flows directed toward sectors perceived to be most resilient or undervalued.

According to analysts at Atlass Portfolio Limited, the rally is likely to be sustained by abundant liquidity and supportive government policies. The positive price movement, while significant, still leaves the market well below its all-time peaks, suggesting there is room for further appreciation. 

While the overall market and top gainers like UPDC and AIICO have shown resilience, the decline in major sectors like banking highlights that a uniform, all-encompassing rally may not yet be on the cards. For now, the narrative is one of a cautious but determined return to equities, with select sectors leading the way.