Investment researchers and consultants at Bancorp Securities Limited, one of the leading investment consulting firms in Nigeria, have advised investors in Nigerian equities market to maintain a diversified portfolio to manage risks while capitalizing on growth opportunities in high-performing sectors.
The experts, in the firm’s ‘Weekly Stock Recommendation Dec23 to Dec 27, 2024’ Note circulated to our correspondent on Monday, hinged their advice on the prevailing stocks’ values and their prospects in the local bourse.
According to the latest data of the NGX, the Nigerian Exchange All-Share Index (NGXASI) closed on Friday at 101,129.09 points, reflecting a 1.76% weekly gain and an impressive 35.25% year-to-date (YTD) growth.
At the close of the trading session for the week, the total market capitalization soared to N61.30 trillion, up 1.76% for the week and marking a 49.82% YTD increase, indicating sustained investor confidence and liquidity inflows.
Similarly, the Market Activity showed that during the week, 2.54 billion units of stocks were traded, representing a 7.10% weekly decline while the value traded increased by N91.38 billion or 83.33% week-on-week, suggesting increased interest in higher-value equities.
The deals executed during the trading sessions increased to 51,395 transactions, reflecting an 18.70% weekly growth, and indicative of higher participation and market depth while the market breadth increased by 1.86%, showing more gainers than losers, signalling bullish sentiment.
A further analysis of the market’s performance on sectoral basis indicated that the Banking Index closed at 1,071.70 points, advancing 3.23% WTD and 19.45% YTD, reflecting strength in financial stocks driven by earnings expectations and dividend announcements.
This is even as Consumer Goods Index rose to 1,654.75 points, gaining 2.92% WTD and 47.58% YTD, fueled by resilient consumer demand and improved profitability across the sector.
During the week, the Industrial Index, however, declined by 0.86% WTD to 3,562.47 points, though maintaining a 31.35% YTD gain while the Insurance Index surged by 8.83% WTD to 619.16 points, delivering a remarkable 92.49% YTD performance, indicating sustained investor interest in the sector, likely due to recapitalization efforts and growth expectations.
In addition, the Oil & Gas Index advanced by 0.99% WTD to 2,713.20 points, boasting an outstanding 160.12% YTD growth, driven by rising global oil prices and domestic sector reforms.
The NGX data showed that the NGXASI Up-Down (UD) ratio stood at 3.15x, highlighting strong bullish sentiment, with three stocks advancing for every one that declined.
The Bancorp Securities’ experts pointed out that this bullish trend underscored investors’ preference for equities amidst economic reforms, policy stability, and sectoral resilience.
The top gainers at the close of the market’s trading sessions on Friday comprised MRSOIL (+36.4%), ETERNA (+32.4%), and HONYFLOUR (+31.5%) while the top losers were JOHNHOLT (-18.7%), MULTIVER (-18.6%), and UPL (-16.3%).
Commenting on the trading trends and outlook of the market, the firm’s analysts noted: “The Nigerian equities market ended the week on a high note, propelled by strong performances across key sectors, particularly Insurance and Oil & Gas. The positive YTD gains and increased value traded suggest sustained investor appetite and optimism.
“Going forward, market sentiment will likely hinge on corporate earnings releases, monetary policy direction, and global economic trends. Investors are advised to maintain a diversified portfolio to manage risks while capitalizing on growth opportunities in high-performing sectors”, they advised.
