Stock market set to bounce back after August losses

Nigerian stock market

Stock market set to bounce back after August losses

Investors lost a total of N36 billion in the month of August 2024 reflecting the bearish market that pervaded in the first three weeks, with the Nigerian Exchange, Limited, NGX, major market indicator, All Share Index, declining by 1.2% Month-on-Month, MoM, to close at 96,579.54 points as against 97,774.22 points in July 2024.

The market capitalization measured as the total value of investors’ assets on the Exchange closed the month of August at N55.477 trillion from N55.513 trillion the previous month.

Meanwhile, analysis of the equities market showed that NGX Mainboard Index closed higher in the month under review at 4,790.05 points from 4,744.96 points the previous month, but the NGX 30 Index went down to 3,589.85 points from 3,614.26 points, just as Banking Index declined to 857.21 points from 801.43 points.

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However, the market bounced back last week with Week-on-Week, WoW, trading showing the All-Share index advanced by 0.6% WoW to 96,580.01 points, driven by strong investors’ interest in OANDO which gained 6.7 % following the completion of the acquisition of the Nigerian Agip Oil Company (NAOC) as well as bargain hunting activities in BUA Foods that went up 5.7%. As a result, the Year-to-Date returns close at 29.2%.

Sectoral performance was broadly positive, as the Oil and Gas Index up 8.5%, Insurance Index 5.8%, Consumer Goods Index 3.5%, Banking 2.0% and Industrial Goods Index 0.1%.

Commenting on the market performance, analysts at Cordros Research stated : “In the near term, we believe the absence of a near-term catalyst will likely tilt overall market sentiment toward the negative, and likely drive negative performances consequently. In the medium term, we expect investors’ sentiments to be influenced by developments in the macroeconomic landscape and the movement of yields in the fixed-income market.”

In their own reactions, analysts at InvestData Consulting Limited stated: “ We expect mixed sentiment as August set for losses on profit taking and sector rotation as market remain on oversold region. Portfolio repositioning is however continuing, with investors taking advantage of pullbacks to buy into value. This is amid the volatility and pullbacks that add more strength to upside potential. Consequently, investors should take advantage of price correction. Also looking at the trends and events across the globe and domestically.”