Strong buying in blue-chip stocks and easing inflation lift equities, as analysts predict cautious optimism ahead….
Trading on the Nigerian Exchange Limited closed last week on a positive note, with investors recording a massive ₦1.765 trillion gain in just three trading sessions.
The rally pushed total market capitalisation, an indicator of the overall value of listed equities to ₦129.125 trillion, up from ₦127.360 trillion in the previous week.
Market indicators show strong momentum
In tandem with the surge in market value, the NGX All Share Index climbed by 1.4 percent to close at 201,156.86 points, compared to 198,407.30 points recorded a week earlier.
Investor sentiment was buoyed by a softer inflation reading for February, which triggered renewed buying interest in fundamentally strong stocks.
Blue-chip stocks drive rally
Gains were largely driven by heavyweights across key sectors, including:
- BUA Cement, which surged 21.0%
- Zenith Bank, up 14.6%
- Dangote Cement, which rose 1.9%
- Lafarge Africa, gaining 5.9%
This buying momentum strengthened overall returns, with Month-to-Date performance rising to 4.3% and Year-to-Date returns climbing to an impressive 29.3%.
Trading activity surges
Market activity also picked up significantly during the week:
- Trading volume jumped by 166.2% week-on-week
- Total value of trades rose by 62.3%
This reflects increased participation from investors taking advantage of market opportunities.
Mixed performance across sectors
Despite the overall bullish trend, sectoral performance remained uneven.
Gains were recorded in:
- Industrial Goods Index (+5.7%)
- Oil & Gas Index (+1.5%)
- Consumer Goods Index (+0.6%)
However, losses were seen in:
- Insurance Index (-4.6%)
- Banking Index (-1.0%)
Outlook: cautious optimism ahead
Analysts at Cordros Capital expect investor focus to shift toward corporate earnings and dividend announcements, particularly from major banks.
They noted that positioning ahead of qualification dates could sustain buying interest in fundamentally sound, high-yield stocks.
Meanwhile, InvestData Consulting Limited projected continued short-term volatility, influenced by liquidity conditions, institutional participation, and global market trends.
Investors urged to stay selective
While the broader outlook for the market remains positive supported by strong corporate fundamentals and attractive valuations, analysts advise investors to adopt a selective strategy.
Focus is expected to remain on companies with solid earnings visibility and defensive characteristics as the market navigates near-term uncertainties.
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