Investors raked N534 billion in the first week of post-lockdown trading as market sentiments surged on the backdrop of the low prices of equities as well as the inflows of budget facilities from the International Monetary Fund, IMF.
As a result of this development, the Nigerian Stock Exchange, NSE, market capitalization, which represents the total value of companies quoted on the exchange, surged by 4.5 percent to close Friday at N12.531 trillion from N11.997 trillion previous week.
Consequently, the NSE All Share Index, ASI, rose by 4.4 percent week-on-week, to close at 24,045.40 points from 3,021.01 points.
Analysis of trading in the week under review also shows that the Year to Date, YtD, loss moderated to -10.4 percent.
Sectoral performances were positive, as gains from bellwether stocks spurred all sector indices. The Consumer Goods index rising 8.5 percent, led the gains, followed by the Banking (+4.0 percent), Oil & Gas (+2.8 percent ), Insurance (+2.8 percent ), and Industrial Goods (+2.2 percent ) indices.
Reacting to the market performance, analysts at Cordros Capital, a Lagos based investment firm, stated: “We highlight cheap assets prices, gradual lockdown easing, and inflows of budget facilities from the IMF, as the key drivers of risk assets accumulation over the week.
”In our opinion, risks remain on the horizon due to a combination of the increasing number of COVID-19 cases in Nigeria and weak economic conditions. Thus, we continue to advise investors to trade cautiously and seek trading opportunities in only fundamentally justified stocks.”
Commenting as well, analysts at Vetiva Capital Management Limited said: “With the gradual easing of the lockdown imposed by the Federal Government, we anticipate a gradual improvement in economic activities and as such expect a number of fundamentally sound stocks to continue to enjoy positive patronage in the near time.”
In his comment, analyst at InvestData, Ambrose Omordion said: ” The upsurge we are experiencing in the market is as a result of gradual easing of lockdown. We are just 5 days to lockdown ease and several investors have been increasing their position in undervalued stocks and we hope it continues this week.”