Nigeria: Stock Market Rebounds as Zenith and GTBank Drive Banking Index Performance

The equities market experienced a resurgence last week, buoyed by the positive half-year (H1’24) results reported by Zenith Bank Plc and GTBank Plc, which bolstered the performance of the Banking Index.

As a result, bargain hunting in response to gains from stocks such as MTN, First Bank of Nigeria Holdings, Oando, and Nestle propelled the market forward. The Nigerian Exchange (NGX) All Share Index (ASI) rose by 1.1%, closing at 97,456.62 points, up from 96,433.53 points the previous week.

Market capitalization also saw a significant increase, climbing by over N607 billion to finish at N56.001 trillion, compared to N55.394 trillion the week before. However, the Month-to-Date (MtD) and Year-to-Date (YtD) returns stood at -0.3% and 30.3%, respectively.

Trading activity showed mixed results, with a Week-on-Week (W/W) volume increase of 20.2%, while value experienced a slight decline of 0.5%. Sectoral performance was positive, highlighted by a 5.1% gain in the Banking Index, a 2.0% increase in the Oil and Gas Index, a 1.6% rise in the Insurance Index, a 1.5% uptick in the Consumer Goods Index, and a 0.2% gain in the Industrial Goods Index.

Analysts at Cordros Research commented on the market outlook, stating, “We anticipate mixed sentiments in the near term, with investors likely focusing on bank stocks due to recent corporate actions. However, we recognize the potential for profit-taking on stocks that have seen significant appreciation in recent weeks. In the medium term, we expect investor sentiment to be influenced by macroeconomic developments and fluctuations in fixed-income yields.”

Similarly, analysts at InvestData Consulting Limited noted, “We expect mixed sentiment to persist due to profit-taking and bargain hunting, especially with expectations of half-year results from other interim dividend-paying stocks as sector rotation continues. Portfolio repositioning is ongoing, with investors seizing opportunities in pullbacks to invest in value stocks. This volatility, along with corrections, enhances the potential for upside. Consequently, investors should take advantage of price adjustments while keeping an eye on both domestic and global trends.”