Equities Market To Remain Cautiously Bullish

Despite a bearish outing in the global equities market, the Nigerian market remained bullish, with the NGX All-Share Index (ASI) advancing by 2.15 per cent over the course of last week, a position analysts believe will continue this week.

Last week, global equity markets were largely driven by geopolitical tensions and rising energy prices, which weighed heavily on investor sentiment, resulting in broad declines across major markets, with the MSCI World Equity Index shedding 3.2 per cent week-on-week.

However, the Nigerian equities market is expected to remain cautiously positive as investors continue to take positions in undervalued and performing stocks. Cowry Assets noted that in the near term, the domestic equities market is expected to maintain “a cautiously positive tone as investors continue to position in fundamentally sound and undervalued stocks following the recent rebound.”

“Bargain hunting and selective accumulation, particularly in large capitalisation and fundamentally strong counters, could provide support to the benchmark NGX All-Share Index. However, intermittent profit-taking and relatively subdued trading activity may limit the pace of gains. Consequently, market performance in the coming week is expected to be driven largely by stock-specific developments and investor sentiment across key sectors.”

Also, Cordros Capital said for this week: “We expect cautious trading as investors lock in gains from recent market advances while closely monitoring geopolitical developments. Over the medium term, market direction is likely to be shaped by macroeconomic trends, Q1-26 earnings releases, corporate actions, and the durability of both foreign and domestic investor flows.”

While global markets as well as major markets in the African region recorded a bearish outing last week, Ghana’s GSE Composite Index, which was up by 10.4 per cent, and Nigeria’s All Share Index remained resilient, reflecting local investor support.

In the African region, Morocco’s Casablanca MASI was down by 5.7 per cent and Egypt’s EGX 30 was down by 3.4 per cent, as indices saw selloffs in key sectors like financials and industrials. Kenya’s NSE 20 also fell by 3.9 per cent as broader risk-off sentiment from international markets limited gains.

The Asia and Middle Eastern markets faltered except for Saudi Arabia’s Tadawul index, which gained 0.6 per cent week-on-week, buoyed by the sharp surge in oil prices. Other markets in the region, including Thailand SET (-7.7 per cent), Turkey BIST 100 (-6.9 per cent), UAE’s ADX General (-5.3 per cent) and Qatar’s DSM 20 (-3.3 per cent), also witnessed weekly declines.

This week, global equities are likely to remain volatile and headline-driven, with divergent performance across regions. Energy-exporting markets may continue to outperform, while US, European and Asian import-dependent markets may face downward pressure. Key macro data, particularly US CPI, could provide catalysts for market moves.

Last week, the Nigerian equities market closed on a positive note, recovering part of the losses recorded in the previous week as the NGX All-Share Index (ASI) advanced by 2.15 per cent week-on-week to settle at 196,968.15 points. In line with the benchmark’s performance, total market capitalisation increased by the same margin to N126.43 trillion from N123.76 trillion in the preceding week, representing an estimated N2.67 trillion gain in market value.

Consequently, the year-to-date return improved to 26.58 per cent, reflecting the sustained positive momentum in the domestic equities market. Market breadth remained negative at 0.76x, with 44 gainers compared to 58 decliners, indicating that losses across a larger number of stocks moderated the broader market’s gains. Trading activity softened during the week as volume and turnover declined by 32.52 per cent and 9.51 per cent week-on-week respectively. However, the number of deals edged higher by 0.35 per cent over the same period.

By the end of the week, investors had traded 3.70 billion shares valued at N177.76 billion across 371,317 deals, suggesting relatively weaker participation overall. Sectoral performance closed the week on a broadly bullish note, with gains recorded across all major sectors under coverage except the insurance sector.

The oil and gas sector led the pack, advancing by 9.43 per cent week-on-week, supported by strong buying interest in Aradel Holdings Plc and Oando Plc. Closely following was the industrial goods sector, which appreciated by 3.89 per cent week-on-week, driven by improved investor confidence in Premier Paints Plc, Lafarge Africa Plc and Dangote Cement Plc.

The consumer goods sector also rose by 1.12 per cent, underpinned by buying activities in PZ Cussons Nigeria Plc and Cadbury Nigeria Plc, while the banking sector edged up by 0.24 per cent on the back of renewed interest in Stanbic IBTC Holdings Plc, Zenith Bank Plc and Guaranty Trust Holding Company Plc. Meanwhile, the insurance sector declined by 1.88 per cent, reflecting sustained selling pressure in AXA Mansard Insurance Plc, Universal Insurance Plc and Cornerstone Insurance Plc.