Equities investors gain N1.83trn in May, amidst buying sentiments

In May, the Nigerian equities rallied N1.833 trillion amidst strong buying sentiments.

Basically, the market capitalisation of the Nigerian Exchange Limited (NGX) gained N1.833 trillion to close at N30.367 trillion on May 31, 2023 from N28.534 trillion at which it opened for trading activities for the month.

Also, the overall market performance measure, All-Share Index (ASI), which tracks the general market movement of all listed equities on the Exchange, rose by 6.42 per cent to close at 55,769.28 points on May 31, 2023.

A significant leap in the market capitalization was on Tuesday, 30th May, 2023, when equities market recorded hitting 2 years highs, the most significant single-day gain since 12 November 2020, as the market capitalization added N1.51 trillion.

The power of government policy statement was obvious on the Nigerian Exchange during the month, following the peaceful transition of power to the new administration’s pro-market policy statements. This triggered an increased buying interest in the hope that policies will impact positively on major sectors of the economy and the market, as the new government unfolds its strategies and agenda to achieve all that were promised.

Financial analysts, however, attributed market performance in the period under review to better-than-expected corporate earnings, growing optimism among market players waxed stronger for the new administration, while the current level of market volatility provides entry opportunity for core investors.

Speaking on market performance in May, the Chief Operating Officer of InvestData Consulting Limited, Ambrose Omordion said “all classes of equities on the exchange witnessed a rally on the inflow of funds as investors and traders took position in low, medium and high cap stocks, even as many more carried out their Annual General Meetings and paid dividend.

“These supported the ongoing dividend income reinvestment in the market arena that had equally enhanced liquidity in the equity space, coupled with the better-than-expected Q1 numbers,” he said.

On market outlook, Cordros Securities Limited said, “considering that we have previously argued that the new administration’s stance and intent to resolve key policy issues, particularly around the current forex framework and oil subsidy payments will be key catalysts for a better-performing equities market, we view the new President’s speech as positive for the equities market.

“Particularly, we believe the President’s statements on resolving current issues around multiple exchange rates and rectification of the current FX repatriation sit well with investors, evidence of which is the positive showing at the end of the month’s session.”

Cordros however noted that policy reforms from the new administration have to be overarching to have a lasting impact on the local bourse over the long term.

Meanwhile, the local bourse extended the bullish run for the fourth consecutive session to start the month of June positively, as the ASI gained 0.07 per cent on Thursday to close at 55,808.25 basis points.

Consequently, the ASI’s year-to-date (YTD) return rose to 8.89 per cent, while the market capitalisation gained N21.22 billion to close at N30.39 trillion.

Analysis of market activities on Thursday showed trade turnover settled lower relative to the previous session, with the value of transactions down by 69.85 per cent. A total of 390.22 million shares valued at N5.73 billion were exchanged in 7,725 deals.

Access Holdings led the volume chart with 51.31 million units while Zenith Bank led the value chart in deals worth N1.09 billion.

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