The exponential appreciation in equities at the Nigerian Exchange Limited, NGX, continued last week as demand for blue chips and dividend paying stocks, such as Dangote Cement, BUA Cement , BUA Foods among others increased across the major sectors of the market to lift investors’ gain to N4.3 trillion Week-on-Week, WoW.
Specifically, the price gain of Dangote Cement 28.82%, BUA Cement 20.98%, BUA Foods 13.25% among others culminated to lift the NGX All Share Index, ASI higher by 8.3% to close on Friday at 102,401.88 points.
Consequently, the Year-to-Date, YtD, return rose 36.95%, while the market capitalisation, which represents the total value of investment in the Exchange gained N4.3 trillion to close on Friday at N56.038 trillion from N51.735 trillion the previous week.
Meanwhile, market operators have continued to digest the outcome of last Treasury Bills’ auction as earnings reporting season is entering its peak with dividend expectation ahead of Monetary Policy Committee, MPC, meeting of the Central Bank of Nigeria (CBN) slated towards the end of February. The Governor of CBN, Dr Yemi Cardoso has persistently noted the desire to cut inflation to 21% in 2024, even as many analysts wonder how the apex bank will achieve such target, with plans to hike rates in the coming all-important meeting.
The meeting will be holding six months after leaving the benchmark Monetary Policy rates unchanged at 18.75% since July 2023.
Reacting to market development, analysts at InvestData Consulting stated: ” We expect positive sentiments and mixed trend to continue on profit taking and reactions to earnings reports, as market players digest these numbers in the face of volatility and coming MPC meeting, while 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.”
Commenting as well, analysts at Cordros Research said: “With the commencement of the 2023 full year, FY earnings season, we expect the NGX to be flooded with corporate earnings in the coming weeks as companies publish unaudited 2023FY numbers with accompanying dividend declarations. We believe this should provide a catalyst for buying activities and outweigh profit-taking activities.”