The Nigerian stock market rebounded impressively in the holiday-shortened week, recovering from the previous week’s downturn. Investor enthusiasm, driven by the approval of MTN Nigeria’s Payment Service Bank (PSB) licence and attractive stock prices, fueled a bullish performance across all trading sessions. This surge resulted in a N5 billion gain for investors, signaling renewed confidence in the market.
Strong Market Performance
By the end of the week, the market capitalization of all listed equities on the Nigerian Stock Exchange (NGX) climbed to N25.639 trillion, up from N25.139 trillion. This marked a 1.99 percent increase, reflecting robust investor activity. Similarly, the All Share Index (ASI) advanced by 1.99 percent, closing at 47,510.38 points compared to 46,631.46 points the previous week.
The rally was propelled by bargain hunting in key stocks, including Nigerian Breweries Plc (+11.8%), Zenith Bank Plc (+8.7%), GTCO (+6.5%), Okomu Oil Palm Plc (+5.6%), MTN Nigeria Communications Plc (+3.4%), and Dangote Cement Plc (+2.4%). These gains underscored the market’s positive momentum and investor appetite for fundamentally strong companies.
Sectoral Gains Drive Growth
The week saw widespread gains across multiple sectors, contributing to the overall market upswing. The banking sector led with a 5.6 percent increase, followed by consumer goods at 1.9 percent and industrial goods at 1.6 percent. The oil and gas and insurance sectors also posted gains of 1.6 percent and 1.1 percent, respectively. This broad-based sectoral performance highlighted the market’s resilience and investor optimism.
Trading activity was notably vibrant, with a 10.9 percent rise in trading volume and a significant 109.2 percent increase in trading value compared to the prior week. These figures reflect heightened investor participation and confidence in the market’s recovery.
MTN Nigeria’s PSB Licence Boosts Sentiment
A key driver of the market’s performance was the approval of MTN Nigeria’s Payment Service Bank (PSB) licence. This development enhanced investor confidence in the telecommunications giant, which saw its stock rise by 3.4 percent. The PSB licence positions MTN Nigeria to expand its financial services offerings, tapping into Nigeria’s growing digital economy. This move is expected to strengthen the company’s revenue streams and market position, further attracting investor interest.
Positive Outlook for the Market
Analysts at Cordros Capital expressed optimism about the market’s near-term trajectory, anticipating continued bullish dominance. They attributed this outlook to investor positioning ahead of first-quarter 2022 earnings announcements. Additionally, institutional investors are closely monitoring yields in the fixed income market, which could influence equity market trends. The combination of strong corporate earnings expectations and strategic investor activity suggests sustained market strength in the coming weeks.
The week’s performance reflects a market poised for growth, driven by strategic investments and positive developments like MTN Nigeria’s PSB licence. As investors continue to seek opportunities in undervalued stocks, the Nigerian bourse appears set for further gains.
