Stocks Bounce Back With N629bn Gain On Fresh Buying Interest
It was a pretty interesting day on the floor of the Nigerian Exchange today and if you have been following the trends lately you would know that we have been waiting for a sign like this for a while now because the market has been a bit shaky but finally the Nigerian equities market staged a significant rebound that has got everyone talking on the street and in the boardrooms too with the overall capitalisation gaining a massive N629 billion in just one single trading session which is honestly quite impressive when you look at how things have been going recently. It feels like the bulls are finally back in town and they are not joking around this time because the fresh buying interest we saw across several sectors was enough to push the numbers into the green and give investors something to smile about after some days of uncertainty and quiet trading.
The main indicator which is the All Share Index or the ASI as most of us call it went up by about 979.36 points which represents a solid growth of 0.41 per cent and this move actually pushed the index to close at 242,729.51 points which is a level that many analysts were looking out for as a psychological barrier of sorts. When you see the market cap rising by N629 billion to close at N155.781 trillion you realize that there is a lot of money moving around and it is not just small retail players but big institutional guys who are probably rebalancing their portfolios or just trying to take positions before the full weight of the earnings season hits the fan.
The whole upturn was mostly impacted by gains recorded in medium and large capitalised stocks which is usually where the real action happens if you want to move the needle on the index and we saw names like Airtel Africa and Chemical and Allied Products popularly known as CAP making big moves alongside the likes of Vitaform Nigeria and Berger Paints and even Dangote Sugar Refinery joined the party which shows that the interest was spread across different sectors like telecoms and manufacturing and building materials too. It wasn’t just one sector doing the heavy lifting which is a good sign for the overall health of the market because it means the recovery is broad based and not just a fluke driven by one single company.
Looking at the market outlook it seems like the folks over at Cowry Assets Management Limited are feeling quite optimistic as they stated that heading into the next session the market is expected to sustain its bullish momentum because there is this renewed positive investor sentiment that is being underpinned by the ongoing earnings season which always brings a bit of excitement to the exchange as people try to guess which companies will announce big dividends or impressive profit margins.
Market breadth was broadly positive which is a technical way of saying that there were way more gainers than losers and to be specific we had 47 gainers outperforming 23 losers so the bulls definitely had the upper hand today and it wasn’t even a close fight if you ask me. Airtel Africa was the real MVP of the day as it recorded the highest price gain of 10 per cent to close at N3,323.40 per share and that is a massive price point for any stock on the exchange but people are still buying it because they see value or maybe they just like the dividends that come with the telco giant.
CAP followed closely with a gain of 9.99 per cent to close at N193.20 and even Zichis Agro Allied Industries which is a name you dont hear every single day rose by 9.97 per cent to close at N27.58 per share. It is interesting to see these smaller or mid-cap stocks jumping up like this because it shows that investors are looking everywhere for gains and not just sticking to the usual suspects in the banking sector.
RT Briscoe also went up by 9.95 per cent to close at N1.28 while FTN Cocoa Processors and DEAP Capital Management and Trust both appreciated by 9.92 per cent each to close at N7.31 and N5.54 respectively which is quite a decent return for a day’s work if you were lucky enough to hold those shares before the opening bell rang.
But of course it was not all sunshine and rainbows for everyone because on the other side of the fence we had some stocks that didn’t do so well and SUNU Assurance actually led the losers chart by dropping 10 per cent to close at N4.05 per share which is a bit of a sting for the shareholders there. Guinness Nigeria also had a rough day with a decline of 9.99 per cent to close at N402.60 and it’s always a bit surprising when a big name like Guinness takes a hit like that but thats just how the market works sometimes especially when people decide to take profits or if there’s some negative news filtering through the grapevine about the consumer goods sector.
Caverton Offshore Support Group also declined by 8.33 per cent to close at N5.50 and Fortis Global Insurance depreciated by 7.69 per cent to close at N1.08 while May and Baker Nigeria rounded up the bottom of the pile with a 6.82 per cent decline to close at N41.00 per share.
When we talk about the volume of shares traded that also saw a significant jump of about 11.59 per cent reaching 1.415 billion units and the total value of these transactions was pegged at N59.426 billion which was all carried out in about 85,804 deals so you can imagine how busy the brokers were today on the floor trying to execute all these orders.
Transactions in the shares of CWG actually topped the activity chart with 421.699 million shares valued at N8.853 billion which is quite a lot of activity for that particular stock and it makes you wonder what is brewing behind the scenes there. Access Holdings was also quite busy with 85.420 million shares worth N2.117 billion changing hands while Chams Holdings traded 83.392 million shares valued at N267.021 million.
Secure Electronic Technology saw 59.755 million shares valued at N59.515 million traded and Zenith Bank which is always a favorite for many investors sold 56.025 million shares worth N7.170 billion and it is always good to see the big banks seeing this kind of liquidity because they are the backbone of the market in many ways.
You know it is funny how the market works because just a few days ago everyone was complaining about how slow things were and how the economy is making it hard for people to invest but then suddenly N629 billion appears out of nowhere because of fresh buying interest and it just goes to show that there is always liquidity sitting on the sidelines waiting for the right moment to jump back in. I think the earnings season is really the main driver here because companies are starting to show their cards and investors are reacting to the numbers they see and if a company shows growth even in a tough economy people are going to want a piece of that action.
The Nigerian market has always been resilient like that and even with all the macro challenges like inflation and foreign exchange issues there are still opportunities for those who know where to look. It is not always easy to navigate these waters and sometimes you get burnt like those who were holding SUNU or Guinness today but that is the risk you take when you play in the equities market.
The rise in market capitalisation to N155.781 trillion is a milestone that shouldn’t be ignored because it shows the sheer size of the wealth that is tied up in these companies and as the ASI continues to climb towards new heights it attracts more attention from both local and foreign investors who are looking for high yields in a world where interest rates are all over the place. I honestly think that we might see more of this bullish trend in the coming days if the big companies continue to release positive earnings reports because nothing excites the market more than a good profit and loss statement and a healthy dividend proposal.
People want to see their money working for them and right now the stock market seems to be providing that avenue for many Nigerians who are looking to hedge against inflation. I was looking at the charts earlier and it’s quite clear that the momentum is building up and if you look at the way the volume increased by over 11 per cent it shows that this wasn’t just a small price movement on low volume but a real active market where people were actually buying and selling with conviction.
When you have over 1.4 billion shares moving in a day it means there is a lot of confidence returning to the system and that is exactly what we need to keep the gears turning. CWG doing over 400 million shares is just wild when you think about it but that’s the beauty of the NGX you never really know which stock is going to be the darling of the day until the trades start rolling in. Access Holdings and Zenith Bank being in the top activity list is pretty standard though because they are the heavyweights and they always provide the liquidity that the market needs to function properly.
Anyway it is a good day for the bulls and a day of reflection for the bears but regardless of which side you are on it is hard to ignore a N629 billion gain because that is a lot of value being added to the wealth of investors and it gives a bit of hope that maybe just maybe the second half of the year will be even better than the first. We will have to see what happens on Thursday and Friday to see if this momentum can be sustained or if it was just a one day wonder but for now let’s enjoy the green screens and the positive vibes because they have been a bit rare lately.
The market is a beast of its own and it doesn’t always behave the way you expect it to but today it definitely behaved in a way that made a lot of people happy and that is always a plus in my book. I hope the information about the gainers and losers helps you make some sense of what went down and maybe even helps you plan your next move because in this game information is everything and staying updated is the only way to keep your head above water. It’s also worth noting that the total deals reached over 85,000 which is a very high number of transactions indicating that retail participation might be picking up again which is always good for market depth.
When the everyday man starts buying stocks again you know something is happening because they are usually the most cautious. Let’s see how the rest of the week unfolds and if Airtel Africa can keep its lead or if someone else will step up to the plate. There is so much happening in the Nigerian economy right now and the stock market is just a reflection of all those moving parts coming together in one place. It is a bit chaotic sometimes but that’s what makes it exciting to watch and even more exciting to participate in if you have the stomach for the volatility that comes with it.
One thing I’ve noticed over the years is that when the market starts to bounce back like this it often leads to a bit of a snowball effect where more people start to jump in because they don’t want to miss out on the gains and that creates even more buying pressure which pushes prices higher and it’s a cycle that can last for weeks if the external conditions remain favorable. The mention of Cowry Assets is important here because they are usually on the money with their predictions and if they say the bullish momentum will be sustained then there is a good chance we will see more green in the coming sessions.
Of course nothing is guaranteed in finance but the signs are definitely pointing in the right direction for now. It is also quite interesting to see how companies like CAP and Berger Paints are performing because they are tied to the real estate and construction sectors and their growth might suggest that there is some underlying activity in those areas of the economy as well. Everything is connected in one way or another and the stock market is the place where those connections become visible through price movements and volume data.
I should probably mention that while the ASI growth of 0.41% might seem small to some people who are used to crypto volatility in the world of traditional stocks that is a very solid move especially for a whole index and it represents a lot of movement across various sectors. The fact that the market closed at over 242k points is a testament to the growth we’ve seen over the long term despite the various hurdles the country has faced. It’s a reminder that there is still value to be found in Nigerian companies and that the local exchange is still a viable place for wealth creation.
I’ll be keeping a close eye on the volume tomorrow to see if it stays above the billion mark because that will be the real test of whether this buying interest is “fresh” as the title suggests or if it was just a temporary spike. Either way it’s been a productive day for the market and hopefully the trend continues. It’s funny I almost forgot to mention how much value Zenith Bank traded which was over 7 billion Naira that’s just crazy for one bank in one day but then again it is Zenith so what do you expect they are always at the top of their game.
Anyway I think that covers most of what happened and I hope this gives a clear picture of the current state of things on the exchange. The Nigerian stock market is definitely not for the faint of heart but days like today make it all feel worth it when you see those numbers climbing up and the market cap reaching for the stars. It’s a game of patience and strategy and right now it looks like the strategy of the bulls is paying off big time. Just keep an eye on those losers too because they can sometimes offer buying opportunities if you think the drop was overdone but you have to be careful with that.
Guinness dropping almost 10% is definitely something to look into if you’re a value investor. But for now the story is all about the N629 billion gain and the fresh interest that made it happen. It’s a good time to be an investor in the NGX if you’re on the right side of the trades. I’ll be watching to see if FTN Cocoa and DEAP Capital can maintain their 9% gains tomorrow or if they will see some profit taking. It’s always a gamble but that’s what makes it fun I guess.
The market breadth being so positive is probably the most encouraging part of the whole report because it shows that the strength is widespread and not just concentrated in a few stocks which gives more confidence to the average investor. Let’s see what Thursday brings and if we can keep this party going for a bit longer. It would be nice to end the week on a high note after everything we’ve been through. The economy is tough but the market is tougher and today it showed its strength once again.
