Equities market appreciates by N1.22trn amid Emefiele’s suspension

The equities market of the Nigerian Exchange Limited (NGX) opened the week on an impressive note with N1.22 trillion gain as investors took some comfort from the Central Bank of Nigeria (CBN) Governor, Mr Godwin Emefiele’s suspension by President Bola Tinubu.

Precisely, the All Share Index (ASI) gained by 2,232.58 basis points or 3.99 per cent to close at 58,163.55basis points. Also, market capitalisation gained N1.22 trillion to close at N31.670 trillion.

The upturn was impacted by gains recorded in medium and large capitalised stocks, amongst which are; MTN Nigeria Communications (MTNN), BUA Foods, Dangote Cement, MRS Oil Nigeria and Nigerian Breweries.

Analysts at Cordros Securities Limited said, “the market performance was impressive as investors reacted positively to the policy signals and planned financial sector reforms from the new administration.”

As measured by market breadth, market sentiment was positive, as 61 stocks gained relative to 13 losers. Access Holdings, Guaranty Trust Holding Company (GTCO), Lasaco Assurance, NASCON Allied Industries and Zenith Bank recorded the highest price gain of 10 per cent each to close at N14.30, N30.80, N1.98, N17.05 and N30.80 respectively, per share.

Ecobank Transnational Incorporated (ETI) followed with a gain of 9.92 per cent to close at N13.85, while Jaiz Bank rose by 9.77 per cent to close at N1.46, per share.

On the other hand, Ellah Lakes and John Holt led the losers’ chart by 10 per cent each to close at N3.69 and N1.26 respectively, while The Initiates Plc (TIP) followed with a decline of 9.62 per cent to close at 47 kobo, per share.

Caverton Offshore Support Group depreciated by 4.62 per cent to close at N1.24, while Veritas Kapital Assurance declined by 4.35 per cent to close at 22 kobo, per share.

The total volume traded increased significantly by 106.4 per cent to 1.186 billion units, valued at N19.226 billion, and exchanged in 10,369 deals. Transactions in the shares of United Bank for Africa (UBA) topped the activity chart with 214.944 million shares valued at N2.333 billion. GTCO followed with 208.061 million shares worth N6.243 billion, while Zenith Bank traded 85.7 million shares valued at N2.623 billion.

Japaul Gold & Ventures traded 72.596 million shares valued at N37.401 million, while Access Holdings sold 72.112 million shares worth N1.015 billion.

Kayode Tokede

Following aggressive investors demand, the stock price of Ecobank Transnational Incorporated (ETI) Access Holdings Plc, Zenith Bank Plc and Guaranty Trust Holdings Company Plc closed yesterday at N13.85, N14.30, and N30.8per share, respectively to record highest gain so far in 2023.

With the demand, the stock price of Access Holdings recorded the highest Year-till-Date (YtD) return among the four Tier-1 banks.  

Access Holdings has appreciated by 68.24 per cent Year-till-Date (YtD) when the stock price opened for trading in 2023 at N5.80 per share, while Zenith Bank gained 28.3per cent YtD from N24 per share to N30.8 per share

In addition, the stock price of GTCO increased by 33.9per cent YtD from N23per share it opened for trading this year to N30.8 per share as ETI gained 30.66 per cent from N10.60 per share to N13.85 per share it closed for trading yesterday.

The gain so far has thrust Zenith Bank’s market capitalisation to N967.01billion; Access Holdings, N508.3 billion and GTCO at N906.48 billion as at June 13, 2023.

Speaking with THISDAY, Chief Research Officer, InvestData Consulting Limited, Mr. Omordion Ambrose said the policies pronouncement by President Bola Tinubu impacted positively on stock market of these banks, stressing that foreign investors are taking position in fundamental stocks.  

He explained furth that 2022 financial year and first quarter 2023 (Q1) results of these companies were impressive and their dividend returns were attractive when compared to yields on money market instruments.

“From the Tier-1 results we have seen so far, Zenith Bank proposed N3.10 final dividend and UBA declared N1.1 dividend payout on the NGX. Access Holdings proposed N1.50 total dividend, while GTCO announced N3.10 total dividend payout to shareholders.

“Some companies’ dividend payout to investors were flat to undermine how the operating environment was challenging in 2022.

“Some of these companies over the years have been consistent in generating profit and dividend payout to shareholders. Their 2022 performance is commendable and it shows how resilient these banks are despite macroeconomy challenges.”

Tinubu in his inaugural address had expressed desire to unified exchange rate.

According to him, “The Central Bank must work towards a unified exchange rate. This will direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that power the real economy.

“Interest rates need to be reduced to increase investment and consumer purchasing in ways that sustain the economy at a higher level.”

According to industry experts and multilateral lenders like the International Monetary Fund (IMF), the harmonisation of the rates and removal of subsidy will improve the attraction of the Nigerian economy to foreign investors and also help the government channel useful funds into more productive ventures like infrastructural investment, education and healthcare.

However, the stock market yesterday opened the week on an impressive note as investors reacted positively to the policy signals and planned financial sector reforms from the new administration.

Precisely, investors’ interest in Airtel Africa that gained 7.8 per cent and MTN Nigeria Communication that rose by 3.6per cent prompted a four per cent gain in the All-Share index to 58,163.55 basis points.

Consequently, the Month-to-Date and Year-to-Date returns advanced to 4.3per cent and 13.5per cent, respectively.

The total volume traded increased significantly by 106.4per cent to 1.19 billion units, valued at N19.23 billion, and exchanged in 10,269 deals. UBA was the most traded stock by volume at 214.94 million units, while GTCO was the most traded stock by value at N6.24 billion.

On sectoral performance, gains in the NGX Banking Index gained 8.8per cent, NGX Insurance index added 4.8per cent, NGX Consumer Goods rose by 3.4per cent, NGX Industrial Goods appreciated by 1.2per cent , and NGX Oil & Gas up by 0.2 per cent reflecting the overall stock market performance.