NGX extends rally as investors rebalance portfolios before year-end

By Abubakar Yunusa

The Nigerian stock market closed the Christmas Eve session on a positive note, extending week-on-week (WoW) bullish momentum despite the shortened trading week.
Specifically, the Nigerian Exchange Limited, NGX All Share Index, ASI, a major market indicator, gained 0.97% WoW, closing at 153,539.83 points from 152,057.26 points the previous week, thus extending its bullish streak as all trading sessions in the holiday-shortened week closed positive.
Trading activities reflected cautious optimism as investors continued to realign portfolios ahead of the year-end, while selectively accumulating stocks with solid fundamentals and improving price momentum.
The positive outturn was driven by buying interest in stocks like International Breweries, which garnered 20.83% WoW, First HoldCo 17.91% WoW, BUA Foods 1.88% WoW, and BUA Cement 2.9% WoW, which offset the impact of selloffs in MTN Nigeria that declined by 5.21% WoW, Dangote Cement -0.16% WoW and Champion Breweries -11.50% WoW. Consequently, the ASI’s Year to Date, YtD return rose to 49.17%.
Meanwhile, 2.876 billion shares worth N63.832 billion in 80,229 deals were traded last week by investors on the floor of the Exchange, in contrast to the 9.849 billion shares valued at N305.843 billion that exchanged hands the previous week in 126,584 deals.
The Financial Services Industry (measured by volume) led the activity chart with 1.984 billion shares valued at N32.680 billion traded in 31,632 deals; thus contributing 68.99% and 51.20% to the total equity turnover volume and value respectively. The Investment Industry followed with 208.695 million shares worth N2.264 billion in 640 deals. Third place was the Conglomerates Industry, with a turnover of 147.002 million shares worth N6.085 billion in 1,676 deals.
Reacting to market performance on Christmas Eve, analysts at InvestData Consulting Limited said: “Market participation improved significantly despite the early 12:30pm close, as investors took advantage of thinner liquidity to execute sizeable trades.”
For market outlook, the analysts stated: “We expect range-bound trading with selective upside in stocks supported by strong fundamentals, positive earnings outlooks, and improving technicals. Developments in global oil prices and domestic liquidity conditions will remain key drivers of sentiment.”