SAT JAN 04 2025-theGBJournal| The Nigerian equities market closed the week on a positive note on Friday, driven by gains in BUAFOODS (+5.1%), MTNN (+3.1%), and WAPCO (+3.6%).
The All-Share Index (ASI) advanced by 1.4% w/w to 103,586.33 points, with the Year-to-Date return settling at +0.6% while market Capitalization appreciated by 2.02% to N63.166 trillion.
All other indices finished higher with the exception of NGX Oil and Gas and NGX Sovereign Bond which depreciated by 0.45% and 3.28% respectively while the NGX ASeM
and NGX Commodity indices closed flat.
Trading in the top three equities namely Royal Exchange Plc, Chams Holding Company Plc and Universal Insurance Plc (measured by volume) accounted for 612.033 million shares worth N773.439 million in 2,108 deals, contributing 23.38% and 1.11% to the total equity turnover volume and value respectively.
Trading activity was robust, as both trading volume and value increased by 93.9% w/w and 35.9% w/w, respectively.
Sectoral performance was broadly positive, as the Insurance (+26.9%), Consumer Goods (+2.2%), Banking (+0.6%) and Industrial Goods (+0.5%) indices recorded gains, while the Oil & Gas (-0.4%) index closed the week lower.
Eight-two equities appreciated in price during the week, higher than sixty-four equities in the previous week.
Eighteen equities depreciated in price lower than twenty in the previous week, while fifty-two equities remained unchanged, lower than sixty-nine recorded in the previous week.
As the new year unfolds, we anticipate heightened market volatility with a bullish tilt, driven by ongoing portfolio rebalancing activities as investors respond to evolving macroeconomic conditions, shifting market sentiment, and position for the earnings season ahead.
Meanwhile, the naira closed flat this week at NGN1,534.05/USD at the Nigerian Foreign Exchange Market (NFEM) despite the CBN intervention at the official window, as the apex bank sold c. USD37.10 million to authorized dealers.
Notably, the country’s FX reserves grew by USD9.60 million w/w to USD40.88 billion (30 December).
In the forwards market, the naira rates increased across the 1-month (+0.3% to N1,573.93/USD), 3-month (+0.5% to N1,631.60/USD), 6-month (+0.9% to N1,711.77/USD) and 1-year (+1.9% to N1,880.59/USD) contracts.
We highlight that the CBN has been primarily supporting FX liquidity, as FPI inflows have remained tepid partly due to existing geopolitical risks including the Middle East regional conflicts, Russia-Ukraine war and the expectation of rising global trade protectionism.
Going ahead, we believe FX liquidity will be suboptimal to keep the naira stable in the near term, just as FX demand increases.
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