Despite social unrest witnessed last week in Nigeria, equity investors continued to take a position in a number of attractive counters.
Investors gained an additional N240billion on Wednesday, October 28 as the bulls retained their positions, pushing this year’s positive return to a new high of +9.67percent.
Amid renewed interest in value stocks, Nestle Nigeria Plc led the list of equities on demand, making its share price to move from day open low of N1175 to N1292.5, adding N117.5kobo or 10 percent.
Also, the share price of Total Nigeria Plc rallied from day open low of N112.2 to N118.9, up by N6.7 or 5.97percent.
Dangote Cement Plc moved up from N152 to N155.3, up by N3.3 or 2.17 percent. Conoil Plc also increased, from N17.35 to N19.05, adding N1.7 or 9.80 percent while Flour Mills Nigeria Plc rose from N26.5 to N28.2, up by N1.7 or 6.42percent.
At the close of the remote trading session on the Bourse, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) increased by 1.58percent to 29,437.60 points, from the preceding day low of 28,980.29 points.
Also, the market capitalisation of listed equities on the Nigerian Bourse increased by about N240 billion, from N15.147trillion to N15.386trillion.
Zenith Bank Plc, Fidelity Bank Plc, ETI Plc, Access Bank Plc, and BUA Cement Plc were actively traded stocks on the Bourse. In 5,947 deals investors exchanged 375,249,909 units valued at N4.634billion.
With all sectors closing in the green on Wednesday, amid significant improvement in investors’ sentiment, barring any external events capable of dampening investor’s confidence,
the record positive performance will filter into the next trading session (Friday) because Thursday, October 29 is a public holiday.
“Earlier, we hinted that the stock market is clearly the only game in town, thanks to the low yield environment.
“Thus, we urged reluctant investors to get involved, ahead of huge maturities expected to bolster stock prices. With mouthwatering returns delivered to investors so far, we are continuously inundated with two questions: when do you see the interest rate environment turning?; do you think the stock market rally is sustainable?
“Well, we think both questions are related, given that a return to double-digit yield environment will clearly discourage the recent bullish sentiment for stocks”, Lagos-based research analysts at United Capital Plc said in their October 28 note to investors.
The analysts do not see a return to double-digit yield in the interim, “no thanks to trillions of naira worth of maturities in the horizon, projected to remain till first-quarter (Q1) 2021”.
“Meanwhile, FPIs funds (in several billion dollars) remained trapped in Nigeria due to currency market illiquidity, some of this would find their way into stocks, in search of alpha. Lastly, the few third-quarter (Q3) 2020 earnings so far submitted points to stronger than expected full-year earnings, as observed in WAPCO, STANBIC, and FLOURMILS. Thus, we do not see a sharp pullback in stock prices for now”, United Capital research analysts further said.
