The Nigerian equities market experienced a remarkable surge on Thursday, June 29, 2023, recording its most significant single-day gain in recent weeks, just prior to the Eid-el-Kabir holiday. The market’s benchmark index, the All-Share Index (ASI), soared by 1.63 percent, equivalent to 1,835.02 points, concluding the trading day at 114,616.75 points. This surge translated to a substantial N1.16 trillion increase in market capitalization, which rose from N71.2 trillion to N72.3 trillion. This impressive performance signaled a renewed sense of optimism among investors and pointed towards a potentially positive trajectory for the market as it entered the second half of the year.
The market’s bullish run was primarily fueled by robust buying interest in highly capitalized stocks, commonly referred to as blue-chip stocks. Companies like Nigerian Exchange Group, MTN Nigeria, Oando, and Champion Breweries led the charge, each posting near or maximum daily gains of 10 percent. These gains reflect investor confidence in the underlying strength and stability of these established companies, particularly in the context of positive first-quarter earnings reports. This focused investment in blue-chip stocks suggests a strategic move by investors seeking reliable returns in a market exhibiting signs of recovery.
Trading activity on the Nigerian Exchange also saw a significant uptick on Thursday. A total of 1.28 billion shares, valued at N32.47 billion, were exchanged across 16,407 deals. This represents a substantial increase compared to the previous trading day, with volume surging by 114 percent, value rising by 104 percent, and the number of deals growing by 20 percent. This heightened trading activity underscores the renewed investor interest in the Nigerian equities market and suggests a deepening level of market participation. Fidelity Bank dominated the volume chart, with 830 million shares traded, followed by Zenith Bank, Japaul Gold, and Guaranty Trust Holding Company.
The gainers’ chart was topped by Nigerian Exchange Group, which saw a 10 percent increase in its share price, closing at N39.60 per share. Champion Breweries mirrored this performance with a 10 percent gain, while MTN Nigeria, Oando, and Morison Industries also registered substantial increases of 9.99 percent, 9.96 percent, and 9.90 percent, respectively. Conversely, Northern Nigeria Flour Mills led the decliners with a 9.97 percent drop in its share price, closing at N125.05 per share. A total of 127 equities participated in trading, with 40 stocks appreciating in value, 22 declining, and 65 remaining unchanged.
Sectoral performance mirrored the overall positive market trend. The Premium Index recorded the highest gain at 3.65 percent, followed by the Banking Index at 2.46 percent. The Oil and Gas Index also saw a significant increase of 2.36 percent, while the Pension and Insurance Indices appreciated by 2.21 percent and 1.31 percent, respectively. This broad-based sectoral growth further solidifies the market’s positive momentum and suggests a healthy diversification of investor interest across different sectors of the Nigerian economy.
Market analysts attributed the impressive rally to a combination of factors, including strategic positioning by investors ahead of the Eid holiday and renewed confidence in the stability of blue-chip stocks, bolstered by strong first-quarter earnings results. This positive performance built upon the market’s recent upward trend, with a week-on-week gain of 2.5 percent, a four-week gain of 4.93 percent, and a year-to-date return of 11.36 percent. This sustained growth reinforces investor optimism and indicates a potential for continued positive performance in the second half of the year. Furthermore, this bullish trend contrasts with Wednesday’s market performance, where a more moderate gain of N224 billion was recorded, pushing the market capitalization to N71.1 trillion. The ASI had increased by 0.32 percent to close at 112,781.73 points, reflecting a one-week gain of 0.79 percent, a four-week gain of 3.61 percent, and a year-to-date gain of 9.58 percent. This indicates a significant acceleration in market growth on Thursday, further highlighting the impact of pre-holiday investor activity and positive sentiment towards blue-chip stocks.
