The Nigerian Exchange, NGX, began the week on a positive note with market capitalization rising by N1.91 trillion, or 1.20 per cent, as the equities market extended its bullish run to four consecutive sessions.
The gains were driven largely by increased buying interest in several stocks, including Fortis Global Insurance, Chams, Nigerian Aviation Handling Company, Airtel Africa and Sovereign Trust Insurance, alongside 18 other equities.
The market capitalization, which stood at N156.60 trillion at the close of trading on Friday, rose to N158.51 trillion this week.
Similarly, the All-Share Index gained 2,956.15 points, or 1.20 per cent, to close at 248,529.75, compared with 245,573.60 recorded on Friday. The market’s year-to-date return also strengthened to 59.71 per cent.
Despite the overall positive performance, market breadth closed negative, with 37 losers against 23 gainers. AVA Capital led the losers’ chart, declining by 10 per cent to close at N9.90 per share. Ecobank Transnational Corporation followed with a 9.92 per cent decline to N64.95, while Caverton Offshore Support Group shed 9.09 per cent to close at N5.
Ikeja Hotel also fell by 8.41 per cent to N43, while FTN Cocoa Processors declined by 8.37 per cent to N8.10 per share.
On the gainers’ chart, Fortis Global Insurance led with a 10 per cent increase to N2.86 per share. Chams followed, gaining 9.80 per cent to close at N4.48, while Nigerian Aviation Handling Company rose by 9.29 per cent to N153.
Airtel Africa gained 8.59 per cent to close at N6,300, while Sovereign Trust Insurance advanced by 6.59 per cent to N1.78 per share.
Meanwhile, market activity weakened during the session, as total volume traded fell by 25.11 per cent to 1.14 billion shares, valued at N27.02 billion, across 59,185 deals.
Consolidated Hallmark Plc led trading volume with 354.07 million shares, accounting for 31.14 per cent of the total volume traded.
First HoldCo recorded the highest transaction value at N5.12 billion, representing 18.94 per cent of the total value traded.
Also Read: Eterna, Caverton lift stock market with N288bn gains
Reacting to the market performance, the Managing Director of GlobalView Capital Ltd., Kebira Aruna, attributed the positive movement to gains recorded by some large-cap stocks with market capitalization of more than N1 trillion.
Aruna, in an interview with the News Agency of Nigeria, said the performance of a few large-cap stocks, often referred to as SWOOTs, could significantly influence the direction of the broader market.
“I know that it is nothing less than one or two stocks worth over N1 trillion that have gained. That is what normally makes the market open,” he said.
According to him, stocks such as Airtel Africa and other large-cap companies have the capacity to drive the market whenever their share prices record significant gains.
He explained that when two or more of such stocks gain, their performance is often reflected in the broader market indices.
“Wherever they shift to, the market follows them. If two of them become positive, there is no way the market will not become positive,” Aruna said.
The analyst noted that the number of large-cap stocks capable of exerting significant influence on the market had increased over the years, reflecting the growth and maturity of the Nigerian equities market.
He said the market had evolved from having only two or three dominant stocks to more than 20 companies with significant market capitalization.
Aruna also said the new pricing methodology expected to take effect on Aug. 16 could lead to greater price movements and increased volatility across different classes of stocks.
He explained that the revised methodology would introduce new board-lot requirements for different classes of stocks.
According to him, the changes could improve price discovery and provide a clearer reflection of trading activities across the market.
NAN
