Nigerian stocks soared to a more than 16-month high on Friday as funds piled into equities, propelled by low interest rates and as early third-quarter corporate earnings showed some companies have weathered the impact of the COVID-19 crisis, traders said.
The all share index rose for a sixth straight session to be up 30,530.69 points or 3.71% to a level last seen in June last year.
Banks and consumer goods companies led the gainers. The index of Nigeria’s top 10 consumer goods stocks gained 5.58% while the banking sector rose 3.48%.
Nigerian stocks started to rally in October after the central bank cut interest rates and as money market liquidity flowed into equities.
Yields on T. bills fell below 1% this week, making equities a clear choice for investors especially given double-digit inflation, said Ahmed Jinad, head of research at Meristem Securities.
Nine-months company results have started to trickle in and some firms have reported higher than expected earnings, helping douse concerns over the impact of COVID-19, Jinad said.
“The impact has not been as severe. So far nine-months have picked up mostly in the foods and telecoms sectors,” he said.
A total of 40 stocks advanced and eight declined, while 100 saw no trades.
Paint maker CAP Plc, flour mixer Northern Nigeria Flour Mills, insurer AXA Mansard, brewer International Breweries and Nestle led the gainers, rising the maximum 10% allowed on the bourse.