NGX extends rally, emerges best performing bourse in Africa
THE Nigerian Exchange Limited ( NGX) extended its bull run for the 16 successive sessions last week, becoming the best performing market in Africa and third in the world, as prices of many stocks hit a new high in the past year.
The development has pushed the market to its 15- year high on the back of strong positive sentiments, as investors gained N699 billion from N26,760 trillion at which the market closed on Friday, April 29, 2022 to N27, to 459 trillion last week Friday.
The all- share index ( ASI) also appreciated by 2.6 per cent to close the week at 50,935.03, the highest level since March 2008 from 49,638.94 achieved as of April 29, 2022.
This is despite the fewer trading sessions within the period. The market opened for three trading days last week owing to holidays.
All other indices finished higher except NGX Insurance, NGX Afr. bank value, NGX Meri value, NGX
Oil/ Gas, NGX Growth and NGX Sovereign which depreciated by1.98 per cent, 1.68 per cent, 0.6 per cent, 1.1 per cent, 6.52 per cent, and 0.09 per cent while NGX Asem index closed flat.
The bullish trend was attributed to in vestors’ jostling for low , medium, and high capitalised stocks across some major sectors. Interestingly, the market traded positively in all three trading sessions last week.
Investors’ demand for bellwethers: Presco (+ 18.6 per cent), Guinness (+ 18.3 per cent), Nigerian Breweries (+ 22.7 per cent), Okomuoil (+ 15.7 per cent), Buacement (+ 8.2 per cent) and MTN Nigeria (+ 6.1 per cent) drove the benchmark index and capitalisation last week.
Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion, said the strong momentum, buying interests, and increased liquidity at this point have created ‘ buy’ signals for discerning traders.
He pointed out that the uptick in domestic inflation is a potent threat to the fixed income market and investment yields, which should be an indication that more funds may likely flow into the equity space as institutional investors balance their portfolios.
However, he warned that market corrections are underway as a result of profit- taking, urging investors to cherry pick only blue- chip.
"Technically, the NGX index action has rallied on impressive earnings and strong demand for stocks, following which we advise investors to play defensive stocks to reduce investment risks around the market.