Equities To Extend Gains On Strong Liquidity – Analysts

Capital market analysts have projected a bullish sentiment to dominate the equities market this week as improved liquidity drives fresh demand for mid- and large-capitalised stocks.

On market outlook, Cowry Assets Management Limited said, “The Nigerian equities market is expected to maintain its positive bias, supported by sustained investor interest in fundamentally sound and large-cap stocks. However, the recent strong rally may trigger intermittent profit-taking, particularly in stocks that have recorded significant price appreciation in recent sessions.”

The firm pointed out that “market direction will likely be influenced by portfolio rebalancing activities, liquidity conditions, and investor positioning ahead of macroeconomic developments. While sectoral rotation may persist, especially toward fundamentally driven counters, overall sentiment is expected to remain cautiously optimistic.”

“Accordingly, we anticipate a mixed trading pattern in the near term, with pockets of buying interest underpinning the market, albeit with increased volatility as investors balance profit-taking with selective bargain hunting.”

Imperial Asset Managers Limited said, “The equity market is expected to sustain a bullish trend, driven by rising liquidity and renewed buying interest in mid- and large-capitalised stocks.

“However, periodic profit-taking is also anticipated. Note that momentum remains high, with the All-Share Index exceeding the 228,000 mark yesterday, showing strong investor confidence.”

Meanwhile, the Nigerian equities market closed last week on a strong note, extending its bullish momentum amid gains in key stocks.

The benchmark NGX All-Share Index (ASI) rose by 7.33 per cent week-on-week to close at 242,277.81 points. Similarly, market capitalisation increased by N10.66 trillion to close the week at N155.994 trillion. As a result, the year-to-date return strengthened to 55.69 per cent, reflecting sustained positive investor sentiment.

Market breadth weakened slightly, closing negative with 47 gainers against 53 decliners, indicating mild and selective buying interest across the bourse. Zichis Agro-Allied Industries led the gainers’ table by 39.62 per cent to close at N21.78 per share. The Initiates Plc (TIP) followed with a gain of 33.04 per cent to close at N30.60, while UACN went up by 27.82 per cent to close at N181.50 per share.

On the other side, United Bank for Africa (UBA) led the decliners’ table by 22.27 per cent to close at N42.75 per share. Royal Exchange followed with a loss of 20.00 per cent to close at N1.36, while Trans-Nationwide Express declined by 18.99 per cent to close at N6.40 per share.

Overall, a total of 4.842 billion shares, valued at N287.756 billion, were traded in 332,453 deals last week by investors on the floor of the Exchange, compared to 3.805 billion shares valued at N213.955 billion in 297,202 deals in the previous week.

The Financial Services Industry led the activity chart with 3.755 billion shares valued at N124.398 billion traded in 146,938 deals, contributing 77.56 per cent and 43.23 per cent to the total equity turnover volume and value, respectively.

The Consumer Goods Industry followed with 177.009 million shares worth N30.853 billion in 36,609 deals, while the Services Industry recorded a turnover of 176.809 million shares worth N4.387 billion in 15,310 deals.

Trading in the top three equities—Access Holdings, United Bank for Africa (UBA), and Wema Bank—accounted for 2.026 billion shares worth N60.036 billion in 39,925 deals, contributing 41.85 per cent and 20.86 per cent to the total equity turnover volume and value, respectively.