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BusinessDay
Nigeria's leading finance and market intelligence news report.

Stocks hit new highs as Nigeria eases Covid-19 induced lockdown  

…investors book N86billion gain in 3 days

As Covid-19 induced lockdown measures are gradually being lifted, the demand for Nigerian stocks steadily increases with positive impact on prices.

In just three trading days into June 2020, investors have gained about N86billion. The market strengthened further by N13billion (NSE ASI + 0.10percent) as the close of trading session on Wednesday June 3.

The market opened this week with equities cumulative value at N13.168 trillion and the NSE All Share Index (ASI) at 25,267.82 points. As at Wednesday June, both indicators have risen to 25,407.96 points and N13.254trillion respectively. As at Tuesday June 2, they stood lower at 25,383.43 points and N13.24trillion.

The market’s year-to-date (ytd) negative returns printed lower at -5.34 percent on Wednesday. Presco led advancers on Wednesday after its share price increased from N41.5 to N45.25, up by N3.75 or 9.04percent, followed by MTNN which advanced from N116.5 to N118, up by N1.5 or 1.29percent.

Guinness Nigeria Plc dipped most from N20 to N19, down by N1 or 5percent, followed by UACN which decreased from N8.4 to N7.7, after losing 70kobo or 8.33percent. In 4,659 deals, equity dealers exchanged 353,329,264 units valued at N7.035billion. FBN Holdings, GTBank, Nigerian Breweries and Zenith Bank were actively traded stocks.

With the continued gradual pick-up in a number of global indicators, equity traders expect the market to continue its bullish pattern, though the possibility of profit-taking cannot be ignored.

“This week, we expect the robust level of liquidity and attractive prices on some bellwether tickers to drive the market to a positive close. More so, we anticipate that the uptick in oil prices and the overall easing of the Covid-19 induced lockdowns will trigger positive sentiment this week. Ultimately, we expect bullish sentiment to be sustained in the Nigerian bourse this week,” said equity research analysts at Lagos-based Meristem Securities.

“This month, we expect the low yield environment in the fixed income space to continue to spur local interest for equities, especially in stocks with prospect of paying interim dividends. In all, we advise investors to continue to position in value and growth stocks that can deliver profitable returns on their portfolios”, Lagos-based research analysts at United Capital Plc said in their June 2 note to investors.

Soon, the market will witness mixed performance when investors begin to take profits following successive runs of gains in the local equities market.

Crude oil prices topped $40 for the first time since March on OPEC cuts, demand recovery. Oil rose on Wednesday supported by lower US inventories, expectations OPEC+ will keep oil output cuts in place and signs of demand recovery from the coronavirus crisis.

Brent crude futures for August were up 59 cents, or 1.5 percent, at $40.16 by 0840 GMT, reaching a high of $40.53, the highest since March 6. US West Texas Intermediate (WTI) crude for July gained 80 cents, or 2.2 per cent, to $37.61.

The Organization of the Petroleum Exporting Countries and other producers including Russia, known as OPEC+, are cutting output by 9.7 million barrels per day (bpd), about 10 percent of pre-coronavirus global output to support prices.

The World Bank Group, one of the largest sources of funding and knowledge for developing countries, is taking broad, fast action to help developing countries strengthen their pandemic response.

The Bank is supporting public health interventions, working to ensure the flow of critical supplies and equipment, and helping the private sector continue to operate and sustain jobs.

“We will be deploying up to $160 billion in financial support over 15 months to help more than 100 countries protect the poor and vulnerable, maintain the private sector, and bolster economic recovery. This includes $50 billion of new IDA resources through grants and highly concessional loans”, World Bank said on Tuesday

 

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