Stock market sees mild gain as investors shift focus to bond auction

Nigeria’s stock market recorded mild gain on Monday as investors shifted their focus to the outcome of FGN bond auction. Equities value rose by N15billion while the benchmark performance indicator rose by 0.02 percent.

The Debt Management Office (DMO) conducted the November 2024 bond auction with an offer size of N120billion across the reopened 2029 and 2031 papers. Ahead of the auction result, analysts anticipated that investors’ demand will be strong.

Futureview research analysts anticipate a mixed market performance this week “as investors shift their focus to the upcoming FGN Bond auction”.

At the equities market, stocks like Beta Glass, Lafarge Africa, and Eunisell Interlinked occupied topmost positions on the list of advanced. Beta Glass rose from N45.35 to N49.85, up by N4.50 or 9.92 percent.

Lafarge Africa also rose from N42 to N46, adding N4 or 9.52 percent, while Eunisell Interlinked increased from N11.99 to N13.18, adding N1.19 or 9.92 percent. John Holt also moved from N7.72 to N8.49, up by 77kobo or 9.97 percent to make the top advancers league.

“Looking forward, the equities market is expected to retain its buy interest as investors cherry-pick undervalued stocks. However, given the high interest rates in the fixed income and money markets, we expect some bearish undertone to persist in the equities market as fixed income biased investors take advantage of the high yields in the fixed income space.

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“Nevertheless, the Bulls will remain incentivised to persist in bargain hunting, given the tremendous mid-long-term opportunities in the equities market. Fund managers and businesses may entertain mid-long-term (≥3 months) investment objectives, cherry-picking only sound equities with strong fundamentals and ongoing/pending corporate actions. This strategy will maximise market opportunities, thereby optimising portfolio returns,” said United Capital research analysts in their November 18 note.

At the close of trading on Monday, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) and equities market capitalisation appreciated slightly from 97,722.28 points and N59.215 trillion respectively to 97,747.27 point and N59.230trillion.

In 9,004 deals, investors exchanged 413,350,004 shares worth N5.336billion. Japaul Gold, Consolidated Hallmark, Access Holdings, UBA and United Capital were actively traded stocks.

“This week, we will closely monitor the market to identify attractive entry points in fundamentally strong stocks. Mid-week portfolio adjustments will be made as needed, with updates provided through the Daily Market Summary to keep our positions optimized,” according to CardinalStone Research analysts in their November 18 note on their Model Equity Portfolio (MEP).

“This week, we anticipate increased buying activities across tickers with appealing prices as investors aims to maximise capital gains opportunities at the tail end of the year. As

such, we expect a positive sentiment to characterise the equities market.

“Also, we expect improving liquidity conditions to taper risk-off bias towards the fixed income market, thus minimising funds outflow from the local bourse, despite the attractive treasury rates,” said Meristem research analysts in their November 18 note.

“However, we note the potential for profit taking activities, especially on tickers that have realised substantial gains in recent weeks. Additionally, the upcoming MPC meeting is

expected to influence a cautious trading approach during the week. Nonetheless, we anticipate an overall bullish bias, with the equities market closing in the green zone this week,” Meristem analysts said.