Nigerian stocks see biggest gain in 2019 as bargain hunters take on market bellwethers

…stocks cross 30,000 points

Nigerian stocks

Equities listed on the Nigerian Stock Exchange (NSE) Tuesday witnessed their biggest gain this year as bargain hunters took advantage of investment opportunities in blue-chip stocks amid scarcity in MTN Nigeria’s shares.

The key performance indicator of the NSE, the All-Share Index (ASI), extended its winning streak into the fourth session after rising 2.87 percent to 30,218.14 points, the market’s best performance since December 24, 2018. As a result, the market capitalisation of traded equities, which opened at N12.94 trillion, closed at N13.31 trillion.

“The upticks we have been seeing since last Friday have been driven by MTN Nigeria,” said Tajudeen Ibrahim, Head of Research at Chapel Hill Denham Securities Limited. “But today’s performance was driven largely by high market cap stocks like MTN Nigeria, Dangote Cement and GTBank.”

The largest company on the NSE, Dangote Cement, rose 3.93 percent to close to N185. MTN Nigeria sustained its rally by 9.98 percent to hit N131.70, while Guaranty Trust Bank (GTBank) surged from its lowest level in over two years by 2.96 percent to N31.30. The three firms account for over 50 percent of NSE market capitalisation.

In a bid by shareholders of market bellwethers at the domestic bourse to take position in MTN Nigeria, Nigeria’s largest telecommunication company by subscriber base which recently listed on the NSE by a way of introduction, there were sell-offs in NSE biggest companies thereby creating investment opportunities in the stocks.

Although the Nigerian economy grew at a sluggish pace of 2.01 percent in the first quarter of 2019 compared with 2.38 percent recorded in the last three months of 2018, analysts say the bullish trend embarked upon by stocks at the local bourse was independent of the GDP report as released by the National Bureau of Statistics early this week.

“The slowdown witnessed in the economy was a resultant effect of the 2019 general elections held in the period,” Gbolahan Ologunro, an analyst at CSL Stockbrokers Limited, told BusinessDay. “This had already been envisaged by investors as witnessed also in the fourth quarter of 2018, hence, priced into the market.”

Having lost 3.9 percent year-to-date, NSE currently underperforms the Ghana Stock Exchange (GSE) with a YTD performance of -3.1 percent, and Johannesburg Stock Exchange which advanced 5.3 percent YTD as at Tuesday.

Market turnover surged 117 percent to N17.2 billion as against N7.9 billion recorded in the previous trading session after a total of 335.6 million shares exchanged hands in 4,453 deals.

Analysts at Afrinvest Securities Limited expressed optimism that the positive market performance would continue on the back of the strong buying interest in the newly listed telecoms firm. “Following sustained interest in MTN Nigeria we expect the bullish run in the equities market to continue,” they said.



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