Last week, the Nigerian Stock Exchange (NSE) recorded gains in all the trading sessions of the week with the All-share index and market capitalization appreciating by 2.63% to close the week at 41,176.14 and N21.530 trillion, respectively.
The growth followed renewed demand by investors who are cherry-picking stocks with attractive dividend yields ahead of full year 2020 dividend declarations.
The week was highly bullish as the number of price gainers and value of trading outperformed the previous week’s performance. For instance, investors staked N32.725 billion on 3.447 billion in 30,327 deals last week compare with N19.867 billion that was invested in 3.394 billion in 26,808 deals the previous week. Also, 60 stocks appreciated last week as against 50 stocks in the previous week.
Analysts at Cordross Capital over the weekend expressed optimism on a sustained bull run, as investors target blue-chip and undervalued stocks in anticipation of a bumper harvest in the current financial year.
“In the short term, we expect the bulls to retain dominance in the market given positioning for FY 2020 dividends amid negative real returns in the fixed income market even as we do not rule out intermittent profit-taking. However, we advise investors to take positions in only fundamentally justified stocks as the weak macro environment remains a significant headwind for corporate earnings.”
Similarly, analysts at Investdata Consulting Limited, urged investors to target stocks offering strong sales or revenue growth in 2021, as this is expected to support increased earnings per share, that would ultimately become the main driver of returns this year.
Meanwhile, a look at the activity chart showed that the Financial Services Industry led with 1.714 billion shares valued at N13.352 billion traded in 15,102deals, thus contributing 49.74 per cent and 40.8 per cent to the total equity turnover volume and value respectively. The Construction/Real Estate Industry followed with 768.131million shares worth N4.203billion in 430deals, while the third place was occupied by the Conglomerates Industry, with a turnover of 279.799 million shares worth N578.694million in 1,199deals.
Trading in the top three equities namely: UPDC Real Estate Investment Trust, Mutual Benefits Assurance Plc and Transnational Corporation of Nigeria Plc accounted for 1.224 billion shares worth N4.459billion in 929deals, contributing 35.52 per cent and 13.63 per cent to the total equity turnover volume and value respectively.
Japaul Gold & Ventures Plc led the price gainers with 56.7 per cent, trailed by Mutual Benefits Assurance Plc with 50 per cent. Royal Exchange Plc chalked up 47.8 per cent, just as AXA Mansard Insurance Plc garnered 34.4 per cent. Champion Breweries Plc gained 32.3 per cent.
Other top price gainers included: Regency Assurance Plc (32 per cent); Coronation Insurance Plc (30.9 per cent); Academy Press Plc, Niger Insurance Plc, and Sovereign Trust Insurance Plc appreciated by 30 per cent apiece.
Conversely, Cutix Plc led the price losers with 12.9 per cent, followed by Daar Communications Plc with 12.9 per cent. Chellarams Plc went down by 9.9 per cent, while Deap Capital Management & Trust Plc shed 9.0 per cent and 6.2 per cent among others.