Respite as investors gain N1.8tr in April amid sustained rally
• Index crosses 50,000 mark, experts pessimistic about sustainability
MASSIVE ‘ buying’ occasioned by improved corporate performance, has triggered an increase in transactions in the equity market as investors gained N1. 85 trillion in April.
The performance followed improved corporate earnings and renewed positive sentiments in blue chips. The benchmark index gained 3,438.566 points or 6.7 per cent to close the month at 50, 126.41 points from 46, 687.85 points posted on April 4, 2022.
Also, market capitalisation for the month rose by N1.85 billion to close higher at N27.02 trillion, from an opening value of N25.17 trillion.
Market breadth for April was positive as advancers outpaced decliners to halt the bear transition, reflecting expectations of positive firstquarter earnings.
Experts hinged the upturn on impressive first quarter ( Q1) earnings reports, especially in agro- business, telecommunication, healthcare, industrial goods, energy, banking and consumer goods that beat market expectations.
Vice President of Highcap Securities Limited, David Adonri, said attributed the growth to high crude oil price and generally impressive first quarter results released so far by listed firms.
He said the market has been in a downturn for a while and this presented opportunities for bargain- hunting, which boosted demand for several stoc ks considered undervalued.
However, he noted that the rally will lose st eam due to increasing socio- political risk, recession in industrialised economies and mounting insecurity.
“The rally is due to high crude oil prices and generally impressive first quarter results released so far . However, sooner or later , the rally will lose steam due to
increasing socio- political risk, recession in industrialised economies and mounting insecurity. Equities react to events. If macroeconomic conditions are stable and external threat is not disruptive, equities will perform well,” he said.
Chief Research Officer of Investdata Consulting, Ambrose Omordion, said the bull dominance was due to positive sentiment and buying pressure, following improved Q1 earnings churned out by quoted companies.
“The flow of funds into the equities was as a result of smart money exiting the money market and some fixed income instruments due to improved earnings, which indicate that stocks can protect against high inflation. As earnings from agriculture, industrial goods, banking and healthcare sectors beat market expectations.”
Yesterday, investors traded 462.6 million shares valued at N8.3 billion in 6801 deals against 669.3 million shares valued at N5.9 billion that exchanged hands the previous day in 7251 deals.