The Nigerian stock market extended its bullish run last week, as investors reaped N3.34 trillion gain, with sustained buying interest in banking, consumer goods and selected industrial stocks, which outweighed pockets of profit-taking witnessed across some other sectors of the market.
The positive close on the Nigerian Exchange, NGX, further reinforced investor confidence in the market as institutional and retail investors continued to reposition portfolios in anticipation of stronger corporate earnings and dividend expectations for the second half of the year.
Market sentiment remained broadly optimistic throughout the trading session Week-on-Week, WoW, supported by renewed accumulation in highly capitalised and fundamentally sound stocks particularly within the banking sector where investors maintained aggressive positioning.
Analysis of trading WoW shows that market capitalisation, which represents the total value of stocks listed on the Exchange, surged to N160.443 trillion last week from N157.094 trillion the previous week.
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In the same vein, another stock market indicator, NGX All Share Index, ASI advanced by 2.3% W/W to 250,330.92 points from 244,775.83 points.
This brings the Month-to-Date, MtD and Year-to-Date, YtD returns to 3.3% and 60.9%, respectively.
Market activity improved as total volume and value traded increased by 18.4% WoW and 24.3% WoW, respectively. On sectors, the Industrial Goods Index surged by 4.7%, Banking Index 2.8%, Insurance Index 2.7% and Consumer Goods Index 1.6%, while the Oil & Gas Index declined by -1.2%.
Commenting on market outlook, analysts at Cordros Asset stated: "Next week, we expect trading activity to be relatively volatile, with intermittent buying interest likely to be offset by profit taking activities. Investors will also closely monitor the outcome of the Monetary Policy Committee, MPC, meeting scheduled for May 20th, where we expect the Committee to maintain the MPR at current levels."
In their own comments on market performance and outlook, InvestData Consulting Limited, stated : " The sustained bullish sentiment in the domestic market also mirrored improving investor appetite for risk assets amid ongoing macroeconomic adjustments and expectations that reforms introduced by policymakers could gradually begin to yield positive results for corporate earnings and economic stability.
"Going into subsequent sessions, the market is expected to maintain its positive bias, supported by sustained liquidity inflow, earnings expectations and improving investor appetite for equities relative to fixed-income instruments. However, the possibility of intermittent profit-taking cannot be ruled out as some highly capitalised stocks continue to trade within overbought territory after the recent extended rally."
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