The Nigerian Exchange (NGX) equities market capitalization increased by N3.3 trillion, reaching N59.43 trillion week on week, mainly due to the IPO of Aradel Holdings PLC.
- Despite macroeconomic challenges, including a rise in September’s consumer price inflation to 32.70%, the local exchange remains optimistic.
- Stockbrokers observed that the rising consumer price index, driven by increases in the food index (over 51% of Nigeria’s inflation basket), did not dampen market confidence.
- The All-Share Index (ASI) increased by 0.47%, closing at 98,070.23 points, supported by the successful debut of Aradel Holdings PLC.
- The market breadth showed a negative trend, with 42 stocks declining while 34 gained.
- Cowry Asset Limited noted that market sentiment is mixed due to ongoing macroeconomic challenges, but the year-to-date return is a commendable 31.16%, although it still lags behind the annual inflation rate.
Last week, Aradel Holdings Plc successfully listed 4.34 billion shares at N702.69 per share through a ‘Listing by Introduction’. Cowry Asset Limited noted that this positive momentum, driven by Aradel’s entry into the market, helped sustain investor confidence and reinforced participation from the oil and gas sector in the equity market.However, trading patterns indicated a weakening momentum in the equities market, leading to lower traded volumes influenced by rebalancing activities across small, mid, and large-cap stocks. Consequently, the weekly trade value surged by 134.5% week-on-week to N73.89 billion, while traded volumes experienced a decline of 51.2% week-on-week to 1.45 billion shares, executed across 39,546 deals—a 6.91% decrease compared to the previous week.Sectoral performance showed a largely positive trend, with three out of the five tracked sectors closing in the green. The Consumer Goods index led with a gain of 1.42%, followed by the Oil & Gas index and the Industrial index, which recorded increases of 1.08% and 0.04% week-on-week, respectively.
The oil and gas sector indeed saw significant benefits from Aradel’s entry, which bolstered investor confidence. Cowry Asset Limited highlighted that this positive momentum was primarily driven by stocks like TRANSPOWER, MECURE, DANGSUGAR, OANDO, ETERNA, and SCOA.
Conversely, investors continued their portfolio rebalancing, leading to a sell-off in financial stocks. This resulted in the Banking and Insurance indices lagging, declining by 0.51% and 1.23% week on week, respectively. The negative performances were largely attributed to sell-offs in REGALINS, INTENEGINS, ROYALEX, FIDELITYBNK, UBA, and JAIZBANK.On a brighter note, TRANSPOWER (19%), MECURE (19%), DANGSUGAR (13%), SCOA (11%), and GOLDEN BREWERIES (10%) emerged as the top attractions for equity investors. Meanwhile, REGALINS (15%), TRIPPLE GEE (15%), CAVERTON (9%), ABCTRANS (9%), and VITAFOAM (9%) were among the top losers. Cowry Asset Limited anticipates that market sentiment will remain positive as investors look forward to upcoming Q3 earnings reports, which have already garnered favorable reactions from the market.
