The Nigerian Exchange Ltd. (NGX) started the week on a positive note as market capitalisation increased by N1.91 trillion, representing a 1.20 per cent gain on Monday.
This marked the fourth consecutive bullish rally.
The uptrend was driven by increased interest in high capitalised equities such as: Fortis Global Insurance, Chams, Nigerian Aviation Handling Company, Airtel Africa and Sovereign Trust Insurance as well as 18 other stocks.
Specifically, the market capitalisation which increased to N160.421 trillion at the opening, and closed at N158.513 trillion.
Similarly, the All-Share Index (ASI) edged up by 2,956.15 points or 1.20 per cent, closing at 248,529.75, compared to 245,573.60 recorded on Friday.
The market’s year-to-date (YTD) return strengthened to 59.71 per cent.
However, the market breadth closed negative with 37 losers and 23 gainers.
AVA Capital led the losers’ chart by 10 per cent, finishing at N9.90, Ecobank Transnational Corporation trailed by 9.92 per cent, settling at N64.95 and Caverton Offshore Support Group shed by 9.09 per cent, ending the session at N5 per share.
Similarly, Ikeja Hotel dipped by 8.41 per cent, closing at N43 and FTN Cocoa Processors dropped by 8.37 per cent, finishing at N8.10 per share.
On the garners’ chart, Fortis Global Insurance led by 10 per cent, settling at N2.86, Chams followed by 9.80 per cent, finishing at N4.48 while Nigerian Aviation Handling Company increased by 9.29 per cent, closing at N153 per share.
Also, Airtel Africa grew by 8.59 per cent, ending the session at N6,300 and Sovereign Trust Insurance soared by 6.59 per cent, closing at N1.78 per share.
Meanwhile, the market activity 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.
Reacting, Managing Director, GlobalView Capital Ltd., Mr Kebira Aruna, attributed the positive movement in the Nigerian equities market to gains recorded by some stocks with market capitalisation of over N1 trillion.
Aruna, in an interview with the News Agency of Nigeria (NAN), said the performance of a few large-cap stocks, often referred to as SWOOTs, could significantly influence the direction of the overall market.
“I know that it is nothing less than one or two stocks worth over N1 trillion that have gained. That is what normally makes the market open,” he said.
According to him, stocks such as Airtel Africa and other large-cap companies have the capacity to drive the market whenever their share prices move significantly.
He explained that when two or more of such stocks record gains, the impact is usually reflected in the broader market indices.
“Wherever they shift to, the market follows them. If two of them become positive, there is no way the market will not become positive,” Aruna said.
The analyst noted that the number of large-cap stocks capable of exerting significant influence on the market had increased over the years, reflecting the growth and maturity of the Nigerian equities market.
He said the market had evolved from having only two or three dominant stocks to having more than 20 companies with significant market capitalisation.
Aruna also said 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.
He explained that the revised methodology would introduce new board-lot requirements for different classes of stocks.
He expressed optimism that the changes would enhance price discovery and provide a clearer reflection of trading activities across the market.
