Stock market value hits N30trn despite post-election uncertainty

The total market value of Nigerian stocks climbed the N30 trillion mark on Monday, despite the uncertainty surrounding the outcome of Saturday’s presidential election.

As results for the presidential election continued to trickle in from various states, investors at the nation’s bourse defied the uncertainty as they bought up stocks across board, with all sectors closing Monday in green.

Though uncertainties around outcome of the general elections and the cash crunch in Nigeria’s economy are dampening investor sentiment and spurring profit-taking, but positive corporate earnings are making stock buyers to maintained their positive outlook on dividend yields and capital appreciation in bellwether stocks.

The election outcome will be the most significant determinant of Nigeria’s direction over the short to medium term; this is a critical factor local and foreign investors are keenly watching.

Ahead of market open, analysts had anticipated a mixed session to start the week, though expecting election results to determine investor sentiment. The market garnered N207 billion or 0.68 percent increase, pushing this year’s return to new high of 7.96 percent.

“We expect the equities market to remain bullish despite post-election uncertainties. We foresee opportunities for the Buy side to increase holdings (in the near-term) on fundamentally sound stocks with improved valuation and dividend performance. Nonetheless, we still expect profit-booking activity for overbought stocks,” analysts at United Capital research said on Monday.

They said the most daunting task for Nigeria’s next President will be to pull the world’s poverty capital from the brink, with Nigerians contending with multidimensional poverty, insecurity, crippling inflation, and power shortages, among other constraints.

“The next President must also fast-track industrialisation and diversification, improve investment-to-GDP, grapple with underperforming sectors and deliver a more competitive currency, and actual reform implementation,” the analysts said.

The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and the market capitalisation of equities increased from preceding day’s low of 54,949.21 points and N29.93 trillion respectively to 55,328.42 points and N30.14 trillion.

Read also: Nigeria’s stock market hits new high ahead of election

This came as investors in 3,186 deals exchanged 149,780,851 shares valued at N1.54 billion. Oando, Transcorp, Fidelity Bank, Chams and UBA were actively traded counters on Monday. Topmost on the buy-side of the bourse are stocks like Stanbic IBTC, Oando, C&I Leasing, Conoil and MRS.

Analysts at Lagos-based Meristem Research, said: “Despite the positive mood in the equities market last week, we highlight lower market turnover and volume traded. Thus, we posit that investors would trade more cautiously this week owing to the tense macroenvironment borne by the ongoing elections.

“Also, we expect investors to take profit on tickers that have appreciated significantly in recent weeks. However, we do not rule out the likelihood of bargain hunting by investors in a bid to position for dividends ahead of full-year earnings releases. Thus, we expect the market to close down, albeit marginally barring bargain hunting on heavy-weight tickers.”

Stanbic IBTC advanced most after its share price rose from N34.50 to N37.95, up by N3.45 or 10 percent. It was followed by MRS, which increased from N30.55 to N33.50, after adding N2.95 or 9.66 percent.

Oando also moved up, from N4 to N4.40, up by 40kobo or 10 percent; C & I Leasing rose from N3.30 to N3.63, adding 33kobo or 10percent, while Conoil increased from N42.60 to N46.85, up by N4.25 or 9.98 percent.