Large cap stocks drive market to new high

Trading on Nigeria’s Bourse closed in the green zone on Wednesday as investors sentiment continues to sway in favour of stocks. Thanks to largely capitalised stocks like Airtel Africa Plc, Dangote Cement Plc, Flour Mills Nigeria Plc, Julius Berger Nigeria Plc, and Dangote Sugar Refinery Plc which helped drive the market to new high.

Airtel Africa Plc recorded the highest gain after its share price moved from N525 to N535, adding N10 or 1.90 percent, followed by Dangote Cement Plc which increased from day open low of N199.8 to N205, up by N5.2 or 2.60 percent.

Flour Mills Nigeria Plc also rallied from N25.4 to N27.9, up by N2.5 or 9.84 percent.
The Nigerian Stock Exchange (NSE) All-Share Index appreciated further by +1.25 percent from 34,340.56 points to 34,769 points, while the value of listed stocks increased by about N223billion, from N17.943trillion to N18.166trillion.

In 7,029 deals, investors exchanged 434,922,233 shares valued at N6.913billion.
Transcorp Plc, Zenith Bank Plc, Access Bank Plc, UBA Plc and FBN Holdings Plc were actively traded stocks on the Nigerian Stock Exchange (NSE).

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“Despite the rather depressing state of the domestic macroeconomic environment, we maintain that the investment case for Nigerian equities remains compelling. Our position is supported by the persistent low yield environment and the elevated liquidity in the financial system.

“These factors, coupled with the more competitive dividend yields as well as the earnings stability of operators in the Banking, Cement and Food processing sectors, are expected to considerably support demand for equities by risk-tolerant investors in the interim”, United Capital research analysts said in their recent note to investors.

“With yields in the Fixed Income market still very unattractive compared to the yields of some dividend-paying stocks, coupled with the increasing inflation rate which drives the real interest rates to a negative point, we expect sentiment to continue to sway in favour of the equities market in the short term, though the possibility of profit-taking cannot be overruled,” Vetiva Research analysts said.