Analysts foresee bright future ,as Stock market investors gain N2.7trn in one week

Optimism emerged at the first trading week of 2024 as the Nigerian stock market recorded an impressive start with investors gaining N2.7 trillion from their investment in the Nigerian Exchange Limited, NGX.

Accordingly, the benchmark index, NGX All Share Index, ASI surged, and broke through the 79,000 psychological mark to record a substantial 6.5%Week on Week, W/W gain to close on Friday at 79,664.66 points from 74,773.77 points the previous week.

Similarly, the market capitalisation which represents the total value of investment in the Exchange surged N2.7 trillion to close at N 43.593 trillion from N40.917 trn the previous week.

Activity summary for the week under review showed that bargain hunting in blue-chip telecommunication stocks –MTNN, which gained 8.0% and Airtel Africa gaining 6.0% propelled the market’s performance.

Activity levels mirrored the market’s broad gauge, as the total traded volume increased significantly by 139.2% W/W while the total traded value recorded a 15.9% W/W increase. Sectoral performance was positive with gains in the Insurance Index 14.1%, Banking Index 10.3%, Consumer Goods Index 4.4%, Industrial Goods Index 3.6%, and Oil and Gas Index 3.0%.

Reacting to market outlook, analysts at Cordors Research said: “In the near term, we believe positioning for 2023 full year earnings releases and accompanying dividends declarations will continue to support buying activities on the local bourse even as institutional investors continue to 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.”

Also commenting, analysts at InvestData Consulting Limited, said: “All eyes are still on the expected corporate earnings of quoted companies and the policy meeting of the Central Bank of Nigeria in this first month of 2024. Trading on NGX opened for the year on a positive note, changing the mixed outlook for 2024, even as the fiscal and monetary authorities are yet to give a clear direction of where they are headed.

“We expect mixed sentiment on profit taking, as NGX crosses 79,000 psychological line on positioning by bargain hunters ahead of unaudited fourth quarter 2023,Q4,23 numbers and volatility in the face of coming MPC meeting, as pullback at this point will add more strength to upside potential. As such, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically. As the anticipated financial market and economic reset in 2024, comes with huge opportunities to create wealth for smart investors and traders.”

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