NGX Again Crosses 100,000 Psychological Line On Buying Sentiment In Oil, Insurance Sectors

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Nigeria’s equities market closed bearish on Friday, as the composite NGX All-Share Index (NGX-ASI) shed 0.12%, closing at 101,129.09 basis points, down from 101,248.02 recorded in the previous trading session.

Despite the profit taking in the shares of Aradel Holding, which on Thursday announced receipt of the much needed Ministerial consent for the bid by a consortium in which it is a member to acquire 100% stake in Shell Petroleum Development Company; and Lafarge Africa, whose parent company had sold their majority holdings to Chinese investors. Despite Friday’s marginal slip, the market achieved a year-to-date (YTD) return of +35.25%, beating the country’s prevailing runaway inflation, at a time when the fixed income market returns is already far in negative real returns, and ahead of the Q1 2025 earnings reporting season which is the peak of the full-year earnings reporting season in Nigeria’s stock market history.

NGXASI Daily Chart

At the close of the week’s trading, the benchmark Index still surged 1.76%, closing at 101,129.09bps, just as and Market Capitalization touched a new all-time high at N61.303tr. The Northward momentum was propelled by stocks in the oil and insurance sectors, following which both sectors boast of year-to-date returns of 160% and 92.49% respectively, thereby offering critical support to the benchmark index. However, 61 stocks recorded share price gains, while 26 suffered declines, just as advancing issues outnumbered decliners by 2.53-to-1 ratio.

NGXASI Weekly Chart (Opening chart)

MRS Oil Nigeria Plc emerged as the week’s biggest gainer, after its price surged 36.36%, closing at ₦180.00 per share, from ₦132.00 each. The company, a major player in the downstream oil and gas sector, has consistently shown strong performance due to its efficient operations in petroleum product marketing. Eterna Plc. followed closely, recording a 32.36% gain to close at ₦29.45 each, driven by its diversification strategy in the energy sector. Honeywell Flour Mill Plc, a leading food processing company, also appreciated by 31.52% to ₦6.05 per share; while Livestock Feeds Plc, a key player in the agricultural sector specializing in animal feed production saw its stock rise by 30.16% to ₦4.10 each. Coronation Insurance Plc., known for its broad insurance offerings, rounded off the top five gainers with a 26.87% increase to ₦1.70.

MRS Oil Nigeria Plc Weekly Chart

On the other hand, John Holt Plc led the losers’ chart, after shedding 18.67%, closing at ₦5.88 from ₦7.23 per share. The company, involved in engineering and leasing services, appears to be facing operational challenges. Multiverse Mining and Exploration Plc followed with an 18.58% drop to ₦4.60, reflecting pressures in the solid minerals industry. University Press Plc, a notable publisher of text books for all ages in Nigeria, saw its stock decline by 16.27% to ₦3.50, highlighting the competitive challenges in the publishing sector. Tantalizers Plc, a prominent player in the fast-food industry, recorded a 13.04% decline, closing at ₦1.60, as it continues to contend with industry competition. PZ Cussons Nigeria Plc, a leading consumer goods company, completed the top five losers, shedding 8.00% to close at ₦23.00 due to persistent economic headwinds and operational inefficiencies.

JohnHolt Weekly Chart

Trends in the Economy: On Thursday, December 19, 2024, President Bola Tinubu presented Nigeria’s proposed N47.9tr 2025 Federal Appropriation Bill to the National Assembly, in which the government announced plans to generate a revenue of N34.8tr, slightly double its 2024 target of N18.32tr, of which N14.55tr had been achieved by Q3. Projections for 2025 include a 4.6% economic growth rate, reduced inflation, and measures to address food insecurity. The 2025 budget features a N13tr deficit to be financed through borrowing, while crude oil production is expected to hit 2.06 million barrels per day. The President also emphasized priorities in security, infrastructure, health, and education.

U.S. Markets: Wall Street rose on Friday, and the US Dollar weakened, as inflation data came in lower than expected, easing concerns over a potential government shutdown and new tariff threats from U.S. President-elect Donald Trump. All three major U.S. stock indexes gained more than 1%, gold climbed, and U.S. Treasury yields eased from recent highs. The Commerce Department’s report showed that the PCE price index, the Fed’s preferred inflation gauge, was cooler than expected, suggesting inflation is moving toward the Fed’s 2% target.

Equity markets had been under pressure during a busy week for central banks, with the U.S. Federal Reserve signaling a slower pace of rate hikes next year. Republican leaders in the House of Representatives stated they would vote to keep the government running and prevent a shutdown ahead of the Christmas holiday.

The Dow rose 497.22 points (1.17%), the S&P 500 gained 63.93 points (1.09%), and the Nasdaq increased by 199.83 points (1.03%). European stocks posted their worst week in over three months, impacted by Trump’s tariff comments on the European Union.

Global stocks tracked by MSCI rose 0.98%, while European indexes such as the STOXX 600 and FTSEurofirst 300 fell 0.88% and 0.96%, respectively. Emerging-market stocks dropped 0.68%, and Asian-Pacific shares outside Japan fell 0.97%, with Japan’s Nikkei losing 0.29%.

Oil prices experienced a range of movements throughout the week. On Monday, Brent crude was priced at $73.50, while U.S. West Texas Intermediate (WTI) crude stood at $70.20. Prices were stable as traders focused on global supply concerns and demand outlooks. Tuesday saw slight increases, with Brent crude rising to $73.80 and WTI reaching $70.50, driven by expectations of cooling U.S. inflation and a weaker U.S. dollar, which boosted demand for oil. On Wednesday, prices fluctuated, with Brent at $73.30 and WTI at $70.10, due to mixed data on Chinese demand and global economic conditions. Thursday brought further declines, as concerns over Chinese oil consumption and OPEC+ revisions to global demand growth took center stage, pushing Brent to $72.80 and WTI to $69.70. Finally, Friday saw oil prices settle little changed, with Brent crude closing at $72.94 and U.S. WTI at $69.46. Both benchmarks ended the week down about 2.5%, reflecting the balance between inflation data, interest rate expectations, and ongoing concerns over global demand.

NGX Banking Index Weekly Chart