Market in green as Nigeria stock investors hunt for interim dividend

Nigeria’s equities market on Monday defied analysts’ earlier expectation of negative outcome as investors buy interest in dividend paying stocks pushed the market higher by 0.19 percent or N107billion.

Stocks like Fidelity Bank, Ellah Lakes, and Livestock Feeds helped the market to close in green. Fidelity Bank Plc which recently released its first half (H1) released proposes to pay interim dividend of 85 kobo per share to shareholders whose names appear in the register of members on October 17.

The bank’s stock price rallied from day-open low of N13 to N14.30, adding N1.30 or 10percent, while Livestock Feeds increased from N3.28 to N3.60, up by 32kobo or 9.76percent, while another major advancer Ellah Lakes rose from N4.50 to N4.88, adding 38kobo or 8.44percent.

The market closed positive despite some analysts’ expectations of muted activity in the equities market this week, particularly with the upcoming Treasury Bills auction likely putting investors’ focus on the fixed-income market.

This month, the NGX benchmark performance indicator has decreased by 0.86 percent, while it has risen this year by 30.67 percent.

Analysts at Meristem research had ahead of Monday’s trading expected the NGX-ASI to close in the negative territory this week.

Read also: Industrial, banking stocks dip market by 0.95% in one week

According to them “there appears to be a lack of significant market catalysts that could spur strong buying interest from investors. As a result, we foresee muted trading volumes and limited upside momentum in equity prices during the week. In our view, investors are likely to be cautious as they await more attractive opportunities or key developments in the market”.

“Moreover, while some investors may position themselves ahead of the nine months 2024 earnings releases, the results are expected to align with the trends seen in half year 2024, offering few surprises. As such, investor reactions to any unexpected results are likely to be limited,” they further noted.

The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and equities market capitalisation increased from preceding day’s lows of 97,520.54 points and N56.038 trillion respectively to 97,706.7 points and N56.145 trillion.

“Looking ahead, we expect mixed sentiments to persist in the equities market. As a result of the stubborn nature of inflation (particularly fuelled by elevated exchange rate environment), the MPC hiked 50bps. We expect this hike to play a background role in the market, with investors and equity-biased fund managers adopting a more cautious approach to trading.

“This approach involves a strict restriction of trading activities to only equities with solid fundamentals who are set for sustained profitability (bottom-line performance) in FY-2024 financials (beginning from 9M-2024 financials). In the same vein, corporates with pending corporate actions will continue to outperform (in terms of positive market sentiments), presenting trading opportunities (in-and-out scenarios),” according to Lagos-based United Capital research in their October 7 note.

According to them, “fund managers/traders may consider improving cash positions, to trade market volatilities (while retaining a holistic mid-long term investment posture). Ultimately, investors may retain an investment posture of ≥3 months. This will enable portfolios to take advantage of positive sentiments during 9M-2024 earning season, as well as remain positioned to profit from the anticipated (cyclical) portfolio rebalancing activities, which would commence toward the end of the year in Q4-2024”.

Stocks like Tantalizer, UBA, Access Holdings, Caverton and GTCO were most traded on the Lagos Bourse as investors in 10,424 deals exchanged 1,308,714,515 shares worth N5.961billion.