As Muslim faithfuls worldwide prepare for the holy month of Ramadan which begins in few days, the Consumer Goods index of the Nigerian Exchange maintained bullish performance last week with the benchmark NGX All-Share Index (ASI) rising by 0.41 percent week-on-week (WoW) to close at 108,497.40 basis points.
Across the sectoral front, market performance was mixed, with three sectors closing in positive territory while three ended in the red. The NGX-Consumer Goods Index emerged as the top gainer, surging by 6.55 percent week-on-week, followed by the NGX-Insurance Index, which rose by 1.47 percent, and the NGX Industrial Index, which edged up by 0.05 percent.
Driven by investors taking positions for portfolio rebalancing, prompted by pressured sell-offs across various counters and shaped by expectations and outcomes of the newly rebased CPI report and MPC decisions, analysts believe the 6.55 percent increase in the Consumer Goods index which is driven by 15 percent gain in Dangote Sugar Refinery and 11.91 percent gain in BUA Foods.
According to analyst at Invest Data Consulting Limited in it’s weekly review of equities on the Nigerian Exchange (NGX), Dangote Sugar Refinery Plc appreciated by 15.00 percent, climbing from N36.00 to N41.40, reflecting strong sales performance and strategic expansion in the sugar industry, ahead of the commencement of the Islamic holy month of Ramadan, when Muslims observe 30 days of fasting and prayer.
It also noted that the same reason may have impacted BUA Foods Plc as it gained 11.91 percent, advancing from N373.50 to N418.00 per share, supported by sustained consumer demand for its products.
Thus, the total market capitalisation of listed equities increased by 0.29 percent week-on-week to N67.61 trillion, despite the cancellation of 166.95 million units of ordinary shares of Dangote Cement Plc during the week.
Strong bargain hunting played a key role in this rise, as equity investors gained N95.93 billion across two of the five trading sessions this week.
Consequently, the year-to-date return of the index climbed to 5.41 percent, although market breadth remained weak at 2.15x, with 58 decliners against 27 advancers.
However, despite the benchmark index’s positive performance, trading activity remained weak, mirroring the trend from the previous week.
Market internals reflected negative sentiment, with the total weekly traded volume declining by 17.12 percent to 2.0 billion units, transacted across 70,853 deals. The total weekly trade value fell by 10.9 percent to N49.89 billion, indicating reduced investor participation.
However, looking ahead, analysts anticipate mixed market sentiment in the coming week as investors await further corporate earnings releases and dividend declarations, while market participants closely analyse the recently published macroeconomic data on the rebased CPI and the rate hike pause by the CBN to assess their impact on investment portfolios.
While advising investors to remain vigilant, focusing on stocks with strong fundamentals to make informed investment decisions, analysts at Cowry Asset Management Company, expect a flow of funds into the equities space as investors seek better investment opportunities, particularly in the near term.
Last week, the NGX Insurance Index also experienced a 1.47 percent gain, bolstered by positive performances from Sovereign Trust Insurance and Coronation Insurance.
Meanwhile, the NGX Industrial Goods Index noted a slight increase of 0.05 percent.
Conversely, the NGX Banking Index and NGX Oil and Gas Index faced declines of 3.22 percent and 2.87 percent, respectively.
Tribune