Lagos: The Nigerian Exchange Ltd. (NGX) began the week on a high note, with market capitalisation experiencing a significant increase of N1.91 trillion, translating to a 1.20 per cent gain on Monday. This uptick marks the fourth consecutive bullish rally for the exchange.
According to News Agency of Nigeria, the rise was primarily driven by heightened interest in high-capitalisation equities, including Fortis Global Insurance, Chams, Nigerian Aviation Handling Company, Airtel Africa, and Sovereign Trust Insurance, along with 18 other stocks. Market capitalisation opened at N160.421 trillion and closed at N158.513 trillion.
The All-Share Index (ASI) also climbed, gaining 2,956.15 points or 1.20 per cent, to close at 248,529.75 from the 245,573.60 recorded on Friday. The market’s year-to-date return strengthened to 59.71 per cent. Despite the gains, market breadth closed negative, with 37 losers and 23 gainers.
AVA Capital led the decliners’ chart by 10 per cent, finishing at N9.90, while Ecobank Transnational Corporation followed with a 9.92 per cent drop to settle at N64.95. Caverton Offshore Support Group shed 9.09 per cent, ending the session at N5 per share. Ikeja Hotel and FTN Cocoa Processors also saw declines of 8.41 per cent and 8.37 per cent, respectively.
Conversely, Fortis Global Insurance topped the gainers’ chart with a 10 per cent rise, settling at N2.86. Chams followed with a 9.80 per cent increase, finishing at N4.48, while Nigerian Aviation Handling Company climbed by 9.29 per cent, closing at N153 per share. Airtel Africa and Sovereign Trust Insurance also posted gains of 8.59 per cent and 6.59 per cent, respectively.
Market activity, however, weakened during the session, with total volume traded declining by 25.11 per cent to 1.14 billion shares, valued at N27.02 billion across 59,185 deals. Consolidated Hallmark Plc led trading volume with 354.07 million shares, accounting for 31.14 per cent of the day’s total volume. First Holdco recorded the highest value of transactions at N5.12 billion, representing 18.94 per cent of the total value traded.
Managing Director of GlobalView Capital Ltd., Mr. Kebira Aruna, attributed the positive movement in the Nigerian equities market to gains recorded by some stocks with market capitalisation exceeding N1 trillion. Aruna noted that a few large-cap stocks, often referred to as SWOOTs, could significantly influence the market’s direction.
Aruna explained that stocks such as Airtel Africa and other large-cap companies have the capacity to drive the market whenever their share prices move significantly. He pointed out that when two or more of such stocks record gains, the impact is typically reflected in the broader market indices.
The analyst emphasized the increasing number of large-cap stocks capable of exerting significant influence on the market, reflecting the growth and maturity of the Nigerian equities market. He noted that the market had evolved from having only two or three dominant stocks to having more than 20 companies with significant market capitalisation.
Furthermore, Aruna mentioned that the new pricing methodology, expected to take effect from Aug. 16, could result in greater price movements and increased volatility across different classes of stocks. This revised methodology would introduce new board-lot requirements for various classes of stocks.