SAT JUNE 01 2024-theGBJournal|The Nigerian equities market rebounded after three consecutive weeks of bearish sentiments, as bargain hunting activities across tickers with attractive entry points pushed the All-Share Index higher by 1.7% to 99,300.38 points.
Precisely, investors’ interests in SEPLAT (+13.7%), FBNH (+14.7%), UBA (+15.6%), DANGSUGAR (+20.5%), ZENITHBANK (+10.0%) and GTCO (+7.2%) spurred the weekly gain.
As a result, the Month-to-Date and Year-to-Date returns for the index increased to +1.1% and +32.8%, respectively. However, activity levels were mixed, as the trading volume increased by 10.2% w/w, while trading value decreased by 23.1% w/w.
Sectoral performance was mostly positive as the Oil and Gas (+9.1%), Banking (+8.7%), Insurance (+3.9%), and Consumer Goods (+2.0%) indices advanced, while the Industrial Goods (-0.1%) index was the sole loser for the week.
Meanwhile, based on the Domestic and Foreign Portfolio Report of the Nigerian Exchange (NGX), total transactions in the domestic equities market declined by 35.7% m/m to N346.23 billion in April (March: N538.54 billion).
We highlight that domestic investors primarily drove the decline in the review period, with domestic inflows (65.1% of market transactions) dropping by 49.3% m/m to N225.40 billion (March: N444.28 billion) driven by m/m contraction across retail (-54.9% m/m) and institutional (-43.6% m/m) transactions.
We understand that the weak domestic participation was due to investors’ preference for fixed-income instruments due to the higher yields, particularly on the short-term papers.
Meanwhile, foreign transactions (34.9% of gross transactions) increased by 28.2% m/m to N120.83 billion (March: N94.26 billion), representing the fourth consecutive month of increase and the highest level since May 2018 (N192.95 billion).
We attribute the sustained improvement in foreign participation to investors’ positive reactions to CBN efforts to stabilize the FX.
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