Banking ups Nigeria’s equities amid rising debt

Trading at the floor of the Nigerian Exchange Limited recorded fifth straight weekly gain in the just-concluded week amid disclosure by the Debt Management Office that Nigeria’s total public debt stock rose Quarter-on-Quarter by 7.12 per cent to N35.47tn as at June 2021 from N33.11tn in March.

The bullish sentiment saw the All-Share Index appreciate by 1.61 per cent Week-on-Week to settle at 40,868.36 basis points, even as the market capitalisation rose to N21.295tn, leaving investors with a gain of N340.29bn.

Market analysis showed that the domestic bourse was buoyed by sustained investors’ interest in banking stocks, especially FBN Holdings shares, which rose by 24 per cent WoW amid increased transaction value. As a result, market activity came in stronger, given the huge transaction value on FBNH shares as above N1bn worth of transactions consistently exchanged hands.

As a result, the value of stocks traded jumped by 35.71 per cent to N21.96bn, but on the flip side, the volume of stocks traded fell by 0.34 per cent to 2.18 billion units.

Other stocks that topped the gainers list, amid the sustained bullish sentiment, included University Press, Ecobank Transnational, Courteville Business Solutions and Eterna, which rose by 28 per cent, 17 per cent, 17 per cent and 10 per cent respectively.

The Year-to-Date loss of the domestic bourse made a return of 1.48 per cent to recover from last week’s loss of 0.12 per cent, even as sectoral performance was largely positive, as three of the five indices tracked closed in green. The banking, oil and gas and industrial indices rose by 4.53 per cent, 0.24 per cent and 0.11 per cent to close at 387.64, 368.16 and 2,091.63 points respectively.

However, the consumer goods and insurance indices fell by 0.51 per cent and 1.51 per cent to 564.30 and 170.43 points respectively. In that line, Cornerstone Insurance shares led the losers’ chart declining by -12 per cent. 

Others included Wema Bank and PZ Cussons Nigeria, which share prices fell by -6 per cent apiece, as well as Honeywell Flour Mill and Neimeth International Pharmaceuticals, which shares also suffered -5 per cent decline apiece.

The local equities market had opened the week’s trading positive, as investors locked in their monies in quoted companies. The shares of ETERNA, United Capital, AXA Mansard Insurance, Pharma-Deko and Livestock Feeds enjoyed patronage the most.

Also, the market had closed the week’s trading in green, as banking shares remained the toast of investors, with the shares of Zenith Bank, ETI and Guaranty Trust Holding Co among the top gainers list.

Analysts were optimistic that in the new week, the Nigerian stock market would further northward.

“We expect the equities market index to close in the positive territory, as investors continue to take position ahead of companies’ nine months’ financial results releases,” analysts at Cowry Asset Management predicted.

Meanwhile, the naira, which appreciated against the greenback by 1.65 per cent at the parallel market to close at N567.50/USD, depreciated by 0.22 per cent to close at N414.30/USD at the Investors and Exporters foreign exchange window. This is despite the 6.71 per cent WoW accretion to the external reserves, which closed at $37.99bn on Wednesday, October 6.

But at the Interbank Foreign Exchange market, NGN/USD rate closed flat at N380.69/$ amid weekly injections of $210m by the Central Bank of Nigeria into the forex market.

The apex bank had allocated $100m to Wholesale Secondary Market Intervention Sales, $55m to Small and Medium Scale Enterprises, even as the same amount of $55m was sold for invisibles.

Ehime Alex
Ehime Alex
Ehime Alex reports the Capital Market, Energy, and ICT. He is a skilled webmaster and digital media enthusiast.

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