• Monday, March 04, 2024
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BusinessDay

Stock market bounces back as investors price in earnings

Foreign inflow into Nigerian stocks falls to pre-reform levels

The Nigerian stock market has bounced back after declining in the last two days of January losses, with the bulls resurfacing to price in full-year 2023 earnings that recently started emerging.

The country’s bourse, which started the new month on a positive note, recovered from its two-day bear run as investors took advantage of the short-lived bearish run to take positions in most stocks with lower prices.

Lagos-based United Capital analysts, in their recent outlook, said they foresaw a positive year for the capital market.

“Through 2024, we expect the premium status of Nigerian equities to remain unchanged, supported by the prevailing situation across major central banks in advanced economies,” they said, while adding that foreign investors will find Nigerian markets attractive as central banks cut rates in 2024, leading to a shift in global capital flow.

With 93.8 percent share price increase this year, Wema Bank leads others in the banking sector. Dangote Cement is leading the industrial sector, rising so far this year by 138.5 percent. BUA Foods is leading other consumer goods stocks with a share price increase of 47.4 percent this year.

“Sentiments remained positive, as investors continue to pick fundamentally sound names at lower prices. We expect a mixed start to the week, as the market anticipates more earnings reports,” analysts at Lagos-based Vetiva said on Friday.

For the oil and gas sector, Japaul Gold is beating others with a share price increase of 80.6 percent this year. In the agricultural sector, Presco is the leader in returns with 34.2 percent, while Transcorp is beating other conglomerates with its 77.8 percent price rally this year.

The benchmark indicator – the Nigerian Exchange Limited (NGX) All Share Index (ASI) – increased to 104,421.23 points on Friday from 102,401.88 the previous day while the value of listed stocks rose to N57.16 trillion from N56.04 trillion.

The market rose by 1.97 percent as activities of bargain hunters outweighed that of profit takers. Twenty-seven equities appreciated as against 35 equities in the preceding week. Sixty-four equities depreciated in price, down from 65 in the preceding week, while 64 equities remained unchanged as against 55 in the preceding week.

The stock market’s record year-to-date return rose to 39.65 percent as of Friday.

“Nigerian equities kicked off 2024 on a strong note, as the NGX ASI gained 35.3 percent in January. Likewise, the positive performance filtered into our picks for 2024, with our conviction stocks returning 12.6 percent in the same period,” Vetiva research analysts said in their January performance review.