Equities rise by 0.43% as investors continue hunt for value

Nigeria’s stock market on Tuesday recorded its first gain this week, rising by 0.43 percent at the close of trading session on the Bourse.

The market’s year-to-date (ytd) return stoodds higher at 39.02percent.

Driven by shares of FBN Holdings which led other major adancers, investors bargain appetite caused the Nigerian Exchange Limited (NGX) All-Share Index (ASI) and its equities market capitalisation to increase from preceding trading day’s lows of 70,946.83 points and N38.823trilllion respectively to 71,250.17 points and N38.989trillion.

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FBN Holdings increased most from preceding day’s low of N24.35 to N26.75, up by N2.40 or 9.86 percent. It was followed by Multiverse which increased from N6.43 to N7.07, adding 64kobo or 9.95 percent.

CardinalStone Research analysts said “This week, we will continue to actively monitor our new positions and take advantage of opportunities as they arise”.

In 7,016 deals, investors exchanged 433,568,032 shares worth N11.114billion.
UACN, UBA, GTCO, NIDF and Access Corporation were actively traded stocks.

Meristem research analysts said in their recent note that they anticipate the continuation of positive sentiment in the market.

“Although, we predict slightly reduced activity
level compared to the previous week. We believe the continued search for value, and positioning for opportunities in the market will spur buying activities, especially in the banking sector.

“Also, we do not foresee a drastic outflow of funds from the equities market to the fixed
income market ahead of the T-bills auctions. Notwithstanding, we expect to see pockets of profit-taking activities on tickers
that have gained. On a balance of factors, we expect the NGX-ASI to close positive this week,” Meristem analysts added.

Coronation Research in their December 4 note to investors said, “These have been very good years for equities, quite simply because listed companies have, for the most part, continued to increase their earnings while Naira interest rates have been extremely low (well below the rate of inflation). Lacking adequate returns from fixed income investments, Nigerian investors have turned to risky assets, and in large measure this
means equities”.

“Given that Naira interest rates are now going up, which implies that investors may move back into fixed income investments,
this era of past performance may not be a good guide to the future – much depends on where rates go from here.

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“All the same, we will continue with the Model Equity Portfolio. If nothing else, it gives us empathy with Nigerian equity market investors and gives us a reason to focus on the market,” said Lagos-based analysts at Coronation Research added.