Nigerian stocks hit biggest monthly gain of N1.25trn

Nigerian equities have risen by record high of N1.25 trillion one month into the second-half (H2), with bulk of the gains coming from largely capitalised stocks.
Some of analysts’ stock picks in the NSE-30 Index, which buoyed the month-to-date (Mtd) gain, include Ecobank Transnational Incorporated Plc, Okomu Oil Palm Plc, Zenith Bank Plc, Forte Oil Plc, Lafarge Africa Plc, Dangote Sugar Refinery Plc, and Guaranty Trust Bank Plc.
Analysts see further uptrend in second-half being majorly driven by far-reaching fundamental factors such as policy consistency and sustainability as well as macro-economic recovery and stability, which had triggered market optimism in second-quarter amid impressive corporate earnings, most of which have been released on the Bourse.
Nigerian stocks, which opened for trading in the second-half with value at N11.452 trillion, reached new high of N12.705 trillion on Friday, July 28, indicating value increase of 10.94 percent.
In the review period into the second-half, the Nigerian Stock Exchange All Share Index (ASI) achieved a month-to-date (Mtd) gain of 11.31 percent or 3,747.23 points. The NSE ASI rose from second-half open level of 33,117.48 points to 36,864.71 points, while the Year-to-Date return stood at 37.17 percent.
“All variables held unchanged, a trend analysis suggests that the All Share Index may be heading for a medium-term resistance level of 42,000 points after breaking through the short-term 30,000 points line in first-half,” according to Kayode Tinuoye-led team of research analysts at United Capital Plc.
With the economy set to rebound and the policy environment seen improving, the analysts are of the view that investors will continue to be on the lookout for stronger corporate earnings performances driven by improved top- and bottom-line numbers.
Among the largely capitalised stocks tracked by BusinessDay, investors in the shares of Ecobank Transnational Incorporated (ETI) Plc recorded the biggest capital gain of 31.68 percent in the first month into the second-half. ETI shares rose from second-half open level N13.97 to N17 as of Friday, July 28, up by N3.03.
Our trend watch further shows Okomu Oil Palm Plc is another stock that also recorded impressive gain of N15.92 or 27.21 percent, from N58.49 to N74.41.
The shares of Zenith International Bank Plc rose by N5.01 or 23.98 percent, from N20.89 to N25.9, while Forte Oil Plc locked gain of N11.63 or 23.22 percent, from month-open level of N50.07 to N61.7.
Ayodeji Ebo, managing director at Lagos-based Afrinvest Securities Limited, is optimistic that the Nigerian stock market will rap-up second-half of 2017 on a positive note, noting that current sentiment will be sustained with the Investor and Export (I&E) window, which is still providing FX liquidity for many corporates.
Other stocks that have impressed analysts watching the NSE-30 stocks include Dangote Sugar Refinery Plc, which rose by N1.86 or 20.66 percent, from N9 to N10.86, while Guaranty Trust Bank Plc also rose from N34.82 to N41.1, adding N6.28 or 18.03 percent.
Dangote Cement Plc booked N30.52 or 14.88 percent gain, from N204.99 to N235.51. Stanbic IBTC Holdings Plc gained N4.53 or 13.72 percent, from N33 to N37.53.
Also, given market expectation of a relatively strong earnings outlook, research analysts at Vetiva Capital expect to see more gains for the NSE ASI in the week ahead.
Nestle Nigeria Plc stocks advanced by N102.27 or 11.35 percent within one month, from N901 to N1, 003.27; United Bank For Africa Plc rose from N8.76 to N9.81, adding N1.05 or 11.98 percent; Access Bank Plc shares gained 81 kobo or 8.70 percent, from N9.30 to N10.11; while Flour Mills Nigeria Plc rose from N27 to N29, indicating an increase of N2 or 7.40 percent.
The dividends expectation is one of the value drivers spurring share prices to the upside, said Sewa Wusu, head of Research Unit at another Lagos-based investment firm, SCM Capital Limited.
Other stocks in the NSE-30 basket that recorded notable gains include Oando Plc, which increased from N7.30 to N7.8, up by 50kobo or 6.84 percent; Nigerian Breweries Plc share price increased from N161 to N171.62, up N10.62 or 6.59 percent, and 7-UP Bottling Company Plc appreciated from N86.45 to N90.5, up by N4.05 or 4.68 percent.
In addition, Transnational Corporation of Nigeria Plc stock advanced from N1.43 to N1.49, an increase of 6 kobo or 4.19 percent, and Seplat Petroleum Development Company Limited rose from second-half open level of N465 to N488, an increase of N23 or 4.94 percent.
The share price of International Breweries Plc rose from N30.57 to N32, up by N1.43 or 4.67percent; Unilever Nigeria Plc booked N1.81 or 4.90 percent gain, from N36.87 to N38.68.