Equities Market Poised For Further Gains On Pension Fund Support

The Nigerian equities market is expected to retain its positive momentum, driven by improved liquidity following the National Pension Commission’s upward review of pension fund equity allocation limits. This development is likely to boost demand for fundamentally strong counters, supporting the market’s upward trend.

The equities market closed last week firmly in positive territory, extending its rally amid heightened trading activity and strengthening investor sentiment. The uptrend was largely supported by the recent upward review of pension fund equity investment limits by the National Pension Commission, which allows Pension Fund Administrators (PFAs) to allocate a higher proportion of assets to equities across sectors.

In the near term, Cowry Asset Management Limited stated that, “We expect the equities market to retain its positive momentum, supported by improved liquidity following the upward review of pension fund equity allocation limits by the National Pension Commission.

Increased capacity for Pension Fund Administrators to channel funds into equities should continue to underpin demand, particularly in fundamentally strong counters.

“Nonetheless, profit-taking may surface in the near term after the recent sharp rally, leading to mild pullbacks. Market performance will depend on sustained institutional participation and sector rotation dynamics. Overall, sentiment remains constructive, with liquidity-driven buying likely to keep the market on an upward path.”

Afrinvest Limited said, “In the new week, we expect a bullish but volatile performance, as recent positive momentum and buying interest support further gains.”

Heading into the new week, Imperial Asset Managers Limited advised investors to trade cautiously and seek bargain-hunting opportunities in fundamentally sound, dividend-paying stocks as the market begins to anticipate full-year corporate earnings and dividend declarations.

For last week, the NGX All-Share Index (ASI) advanced by 6.16 per cent week-on-week to close at 182,313.08 points. Similarly, market capitalisation rose by N6.79 trillion to close the week at N117.027 trillion.

Market breadth remained positive, with 79 advancers outpacing 27 decliners, indicating broad-based buying interest. Zichis Agro Allied Industries led the gainers’ table, rising 60.71 per cent to close at N10.80 per share. Union Dicon Salt followed with a gain of 60.15 per cent to close at N20.90, while Daar Communications went up by 55.26 per cent to close at N2.95 per share.

On the other side, Abbey Mortgage Bank led the decliners table by 26.42 per cent to close at N11.00 per share. Sovereign Trust Insurance followed with a loss of 17.16 per cent to close at N2.80, while Ecobank Transnational Incorporated (ETI) declined by 13.29 per cent to close at N45.00 per share.

Meanwhile, a total turnover of 4.652 billion shares worth N193.326 billion in 286,751 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 3.860 billion shares valued at N128.581 billion that exchanged hands the prior week in 240,463 deals.

The Financial Services Industry led the activity chart with 2.782 billion shares valued at N74.063 billion traded in 104,325 deals, contributing 59.81 per cent and 38.31 per cent to the total equity turnover volume and value, respectively.

The Services Industry followed with 573.189 million shares worth N7.177 billion in 28,784 deals, while the Consumer Goods Industry recorded a turnover of 317.667 million shares worth N24.027 billion in 33,280 deals.