• Thursday, March 28, 2024
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Stocks jump by most since early January as Dangote Cement gains maximum 10%

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Nigerian stocks extended gaining streak Wednesday after bellwether stock Dangote Cement gained a maximum 10% to push the market by the most since the start of the year.

The main equity gauge Nigeria Stock Exchange All-Share Index rose 3.02%, its fifth straight gain and longest since the start of 2020.

Wednesday’s gain is the second biggest since 3.54% on January 8 and comes despite continued decline in Brent price, lockdown in major states and rise in COVID-19 cases in Nigeria.

CSL Stockbrokers analyst Gbolahan Ologunro said fundamentals driving stock gains are unclear but investors could be taking advantage of cheap valuations in the market.

He said banking stocks like Zenith and GTB are trading at deep discount to their intrinsic value, while renewed interest in Dangote Cement might be due to market expectation that a part of the proceeds from its bond raise would be used for share buyback.

“The outlook for the market still remains bleak,” he said.

Gains in Dangcem (10% to N133.1), Zenith Bank (9.66% to N15.9), Nigerian Breweries (9.84% to N26.8) helped pare broad market’s year’s loss to 16.03%.

Afrinvest noted that Investor sentiment as measured by market breadth (advance/decline ratio) rose to 2.5x from the 2.4x recorded in the previous session as 27 stocks gained relative to 11 losers.