Stock Market Gains Over N1 Trillion Amid Mixed Sentiments on Earnings and Dividends

The Nigerian stock market experienced mixed sentiments last week as corporate earnings reports for Q4’24 influenced investor decisions. While some companies posted strong earnings, sparking buying interest, others fell below expectations, leading to profit-taking activities. Despite this, market performance remained positive, with investors showing strong interest in stocks like Nestlé, Stanbic IBTC, and Nigerian Breweries.

Market capitalization on the Nigerian Exchange Limited (NGX) grew significantly, rising from N63.65 trillion to N64.71 trillion within the week, marking a gain of over N1 trillion. The NGX All-Share Index (ASI) also saw a 0.9% increase, closing at 104,496.12 points compared to 103,598.30 points the previous week. Analysts attributed these gains to the strong performance of key stocks such as Nigerian Breweries, which surged by 15.5%, Nestlé by 11.4%, and Stanbic IBTC by 8.2%.

Despite the overall positive trend, trading activity was mixed. The total trading volume increased by 6.3% week-on-week (W/W), indicating heightened investor participation, but trading value declined by 8.0% W/W. Sectoral performance also varied, with the Consumer Goods Index rising by 4.0%, Banking Index by 2.5%, and Oil & Gas Index by 1.0%, while the Insurance Index dropped by 2.9% and the Industrial Goods Index fell by 0.5%.

Market analysts at Cordros Research predict that earnings reports will continue to drive investor sentiment, with companies reporting strong financials likely to attract more investments. Similarly, analysts at InvestData Consulting expect mixed reactions as investors digest corporate numbers, rebalance their portfolios, and take advantage of price corrections in a market shaped by inflation concerns and global economic trends.

Looking ahead, volatility and pullbacks are expected to persist, but analysts suggest that investors should focus on companies with strong fundamentals and dividend potential. With ongoing sector rotation and price adjustments, strategic investments in value stocks could yield long-term gains despite market fluctuations.

Source: Vanguard