The Nigerian stock market rebounded with a notable N437 billion gain after several companies announced dividend payouts for the 2024 financial year. These announcements reversed the previous downward trend and boosted investor sentiment.
Several financial institutions reported strong earnings for 2024, accompanied by attractive dividend declarations. Analysts suggest that portfolio rebalancing and window-dressing activities also contributed to the bullish mood, enhancing confidence in the local market.
By the close of the week, the NGX All-Share Index (ASI) rose by 0.66%, reaching 105,660.64, while market capitalization climbed to N66.26 trillion. Although the NGX Oil/Gas and NGX Commodity indices both saw declines of 1.65% and 0.76%, respectively, all other indices posted gains, with the NGX AseM index remaining unchanged.
The NGX Banking Index was the week’s best-performing sector, advancing 4.28%, led by strong performances from banks like Guaranty Trust Holding Company, FCMB Group, Fidelity Bank, and First HoldCo. The NGX Insurance Index followed with a 3.21% increase, while the NGX Consumer Goods and Industrial indices posted modest gains.
The market’s overall performance reflected growing optimism, with three out of five trading sessions ending positively. The year-to-date return for the ASI improved, suggesting increased investor confidence. Market breadth was also positive, with 43 stocks advancing, outpacing 36 decliners.
Trading activity spiked, with the total number of transactions rising by 7.48% week-on-week to 61,309. The volume of shares traded surged by 159.2% to 7.52 billion units, while the total value of trades jumped by 730.04% to N398.95 billion. Institutional participation, particularly in anticipation of dividend payouts, played a significant role in driving these numbers.
The industrial goods sector led the volume chart, with 4.92 billion shares valued at N331.99 billion traded in 2,969 deals, contributing 65.46% of total volume and 83.22% of total value. The financial services sector followed, with 2.09 billion shares worth N31.74 billion traded in 32,421 deals.
Despite the overall positive sentiment, some stocks saw steep declines as investors took profits. Africa Prudential Plc was the worst performer, losing 60.45%, while CWG, John Holt, UH Real Estate Investment Trust, and United Capital also saw significant losses.
Analysts from Cowry Assets Management predict that the bullish trend will continue as the market enters the earnings season, with dividend announcements likely to sustain interest in blue-chip stocks. However, they caution that portfolio rebalancing and profit-taking could introduce some volatility.
They advise investors to focus on fundamentally strong stocks with consistent earnings growth and resilient business models to ensure sustainable long-term value creation.
