Here’re stocks that helped market defy elections uncertainties

Despite the uncertainties posed by Nigeria’s general elections, the stock market still showed optimism about the economic direction of the country, hence the pricing up of shares of listed companies. More investors had in Q1 positioned for final dividends as many companies released their full year 2022 financials.

Q1’23 in review

In first quarter (Q1) to March 31, the market yielded return of 7.08percent despite the profit taking activities seen in March. The month of March ended with a negative return of 1.70percent amid absence of positive catalysts to drive buy-interest on the Bourse

With the anticipation of other full year 2022 results, market watchers expect it to positively drive the market in the short-term. In the Q1’2023 period, the NGX All Share Index (ASI) rose to 54,232.54 points. Market capitalisation of listed companies also closed higher at N2.544trillion. NGX also recorded N318.52billion of listings within the first quarter of the year across its asset class categories. In total, the market did N265.48billion in value from 18.04billion shares in 232,632 deals.

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All key sectoral indices closed Q1 in green

In the review first quarter, all key sectoral indexes closed in green, led by NGX Consumer Goods index which increased most by 19.32percent. Others are: NGX Banking Index (+7.81percent), NGX Oil & Gas Index (+10.45percent), NGX Industrial Index (+6.05percent), and NGX Insurance Index (+1.81percent.

These stocks helped market defy election uncertainties

The share price of Tripple G increased by 241.8percent in just three months, it was followed by John Holt which rose by 17.8 percent in three months to March 31, 2023, MRS also increased by 98.2percent and that of Northern Nigeria Flour Mills which increased by 94.3percent in the review quarter.

Other stocks that helped push the market’s impressive positive close to first quarter are: Oando (+45.4percent), Conoil (+43.4percent), Fidelity Bank (+23percent), Transcorp (+23percent), Lasaco (+26.4percent), C& I Leasing (+24.4percent), Nahco (+26.6percent), RedStar (+22.6percent).

Berger Paints was also up by +16.7percent in Q1’23. Stanbic IBTC increased by 12.4 percent. Cutix rose by 11.4percent. Nascon rose by 15.3percent. Unilever increased by 16.4percent. Total Energies went up by 13.4percent. Okomu Oil was also up by 11.2percent. Julius Berger advanced by 10percent. Also, in the first-quarter, MTNN share price increased by 11.6percent. Ikeja Hotel went up by 16.2percent.

What analysts expect this week…

In their April 3 market preview, Meristem research analysts said, “We highlight that despite the marginal negative close in the market last week, the mood was relatively upbeat as market turnover, the volume traded, and market breadth improved.

“Owing to the broad positive earnings releases across the banking, insurance, and other sectors; investors are expected to take positions in some of these tickers. Also, we envisage bargain hunting activities from investors across sectors. Nonetheless, we do not rule out profit-taking activities on some tickers that have appreciated. Overall, we expect the market to close in the positive this week”.

In their view, Vetiva analysts anticipated a mixed start to week to trading in the equities market, “as investors wrap up their portfolio rebalancing activities”.

“The Central Bank of Nigeria’s naira redesign policy, the amount of currency in circulation in the nation decreased by 29.16percent month-on-month (m/m), from N1.4 trillion in January 2023 to N900billion in February 2023. Despite the intended objective of moderating inflation, inflation ticked up in February.

“The cash crunch had a countervailing effect on economic activities amid numerous digital transaction failures, restricted access to cash in rural areas, and the crippling of the informal sector. While high base effects could momentarily ease inflation, the suppression of demand may not tame inflationary pressures over the medium term, as inflation in Nigeria is primarily cost-push,” the noted.

Also, United Capital research analysts said, “Looking ahead, we expect risk-on sentiments to be sustained in the equities markets. The choice strategy is to take positions in stocks with attractive pricings, solid valuations and dividend yields ahead of the dividend-paying season”.