Analysis From Experts States That Santa Claus Rally Will Continue at the NGX This Week

Analysis from top market analysts have reported that the Nigerian stock market will sustain its positive trend as investors seek bargain-hunting opportunities. Last week was a success as investors smiled as the Santa Claus rally continued.

At the end of last Friday's first trading week, the NGX added more than N2.6 trillion to market capitalisation as stocks were driven by positive market breadth and huge interest across stocks.

The opening week did not only experienced an increase in market highs but also saw an increase in benchmarks.

Analysts Optimism From Different Sectors

Analysts at Afrinvest Limited said, “This week, we anticipate an extended positive performance on the bourse, buoyed by strong investor sentiment.”

Analysts at Cordros Securities Limited said, 

• In the near term, we believe positioning for 2023 full-year earnings releases and accompanying dividend declarations will continue to support buying activities on the local bourse even as institutional investors search for clues on the direction of yields in the FI market.

• However, we advise investors to seek trading opportunities in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.

Talking about the bullish run expected to last for some time, Analysts at Cowry Assets Management Limited said that the market is going to be positively influenced by profit-taking activities within the local market

They said,

• As the NGX-ASI approaches the psychological threshold of 80,000 or more, market participants are expected to position themselves strategically and take considerable advantage of the price corrections.

• The looming monetary policy committee meeting in January and the impending earnings and reporting season are anticipated to be pivotal factors shaping market dynamics in the near term. Amidst all these, we advise investors to take positions in stocks with sound fundamentals and whose earnings yield and earnings per share support a higher payout ratio while taking advantage of the price corrections in the market.

Last Week’s Trading Activities

Investors celebrated as the NGX experienced success in all the trade sessions last week. The positive trend is attributed to the bullish run from 2023 to the first week of 2024, with gains at all sessions.

The market opened for four trading days instead of five due to the Public Holiday (New Year) issued by the federal government on January 1st.

The All-Share Indeed gained by 6.54% week-on-week to close at 79,664.66 points. However, market capitalisation rose by N2.680 trillion to close the trading week at N43.594 trillion.

The NGX Banking and NGX Insurance indices led gainers, exhibiting increases of 10.29% and 14.08%, respectively. 

The NGX Consumer Goods, NGX Industrial Goods, and NGX Oil & Gas indices also recorded appreciations of 4.40%, 3.58%, and 3.00%, respectively.

The market breadth for the week was positive, as 88 stocks gained in price, 17 equities declined in price, and 50 equities didn't experience any change at all. 

Top Gainers: Transnational Corporation led the chart by 46.19% to close at N12.66 per share. Ikeja Hotel followed second with a gain of 46.17% to close at N8.77, while Unity Bank finished third with 45.06% to close at N2.35 per share.

Top Losers: C&I Leasing led with 39.64% to close at N3.38 per share. SCOA Nigeria followed second with a loss of 17.68% to close at N1.63, while Champion Breweries finished third by declining by 11.81% to close at N3.66 per share.

The total turnover of 3.320 billion shares worth N41.755 billion in 46,994 deals was traded last week by investors on the floor of the Exchange.

Other Analysis Calculated

The Financial Services Industry (measured by volume) led the activity chart with 2.399 billion shares valued at N26.054 billion traded in 22,833 deals, contributing 72.25% and 62.40% to the total equity turnover volume and value, respectively.

The Conglomerates Industry followed with 213.139 million shares worth N2.434 billion in 2,284 deals, while the Oil and Gas Industry traded a turnover of 163.313 million shares worth N2.054 billion in 3,443 deals.