Last week was mixed amid recovery and sector rotation, impacting positively on the Nigerian Exchange as the benchmark All-Share index closed higher, halting previous week’s bearish sentiment. There was buying interest in highly priced stocks among others which weighed on the index, just as market players continue to reposition and rebalance their portfolios in the face of the corporate earnings season that recently kicked off.
Trading earnings season as it drives prices up and down, market players should have better understanding of timing in equities’ trading and investing by effectively combining fundamentals and technical analysis in any season and market condition.
The market turned positive, due to a possible market reaction to the recent announcement of a 50% tariff hike rate for GSM operators by the Federal Government, a situation that is likely to have positive impact on the revenue and profit of operators in the sector like Airtel Africa and MTN Nigeria.
This is made even better by the impressive corporate earnings released so far on the exchange, even as the market started reacting to the numbers and news in the hope of more earnings reports inflow with the month of January gradually winding down.
NGXASI Weekly Chart
Technically, positive sentiment spilled over the broader market during the week under review, a trend that is likely to continue in the new week being the last for the month, ushering in February, when the market is expepcted to witness more audited earnings inflow and dividend announcements.
Last week, investors traded a total of 3.132bn shares worth ₦76.552bn in 61,456 deals on the Exchange, an improvement over previous week’s 2.252 billion shares valued at ₦58.831bn across 63,657 deals.
At the close of the week’s trading, the NGX All-Share Index gained 1.22%, closing at 103,598.30, while Market Capitalization increased by 1.26% to ₦63.645tr, arising from the listing of additional 9.25bn ordinary shares of 50 Kobo each of Lasaco Assurance Plc at N1.20 per share on Thursday, January 23, 2025 on the Daily Official List of the NGX. This followed Lasaco’s Private Placement. With the additional shares, the total issued, and fully paid-up shares of Lasaco Assurance Plc increased from 1,833,585,855 to 11,083,585,855 ordinary shares of 50 Kobo each.
SCOA Weekly Chart
SCOA Nigeria Plc, a company into vehicle sales, distribution, and engineering solutions, gained 59.68%, rising from ₦2.48 to ₦3.96; just as shares of UPDC Plc, a property development and management firm, appreciated by 19.05%, closing at ₦2.00 from ₦1.68 per share. Coronation Insurance Plc, a major player in Nigeria’s insurance sector, rose by 15.32%, ending at ₦2.56 from ₦2.22; ahead of Royal Exchange Plc, a diversified financial services group, whose share price increased by 14.61%, closing at ₦1.02 from ₦0.89. DAAR Communications Plc, an independent electronic media group, advanced by 13.51%, moving from ₦0.74 to ₦0.84.
Sunu Assurance Weekly Chart
The biggest decline for the day was Sunu Assurances Nigeria Plc, an insurance provider specialized in life and non-life coverage, after its share price lost 25.11%, closing at ₦5.01 from ₦6.69 each; Eunisell Interlinked Plc, a chemical and specialty fluids company, dropped by 18.95%, closing at ₦12.66 from ₦15.62 per share. John Holt Plc, a conglomerate with interests in engineering, construction, and leasing, shed 18.47%, ending at ₦8.30 from ₦10.18. Abbey Mortgage Bank Plc, a leading mortgage provider in Nigeria, decreased by 14.60%, closing at ₦3.10 from ₦3.63. Cornerstone Insurance Plc, known for its innovative insurance solutions, dropped by 14.29%, closing at ₦3.48 from ₦4.06.
Trending in the Economy: Nigeria’s debt service costs reached N3.57tr in Q3 2024, a 1.71% increase from the level in Q2, driven by higher external obligations and Naira depreciation. External debt servicing rose to $1.34bn (about N2.14 trillion), up 29.7% in Naira terms, mainly due to increased payments to multilateral and bilateral creditors, including China’s Exim Bank. Domestic debt servicing fell to N1.43 trillion, with a notable rise in interest payments on Nigerian Treasury Bills.
The increased debt service highlights the need for better fiscal management and sustainable revenue generation strategies.
Global Market and Oil: Wall Street’s major indexes ended lower on Friday as investors paused to assess the latest mixed economic data and earnings ahead of a key Federal Reserve meeting and economic updates next week.
Technology stocks, including Nvidia, led declines, reversing strong gains earlier in the week. Housing market data exceeded expectations, but an S&P Global survey showed business activity slowing to a nine-month low, with rising prices balanced by increased hiring.
Consumer sentiment dropped to 71.1, and traders expect the Fed to hold interest rates steady at its Jan. 28-29 meeting, with a possible rate cut in June, according to CME Group’s FedWatch tool.
The Dow fell 140.82 points (0.32%) to 44,424.25, the S&P 500 lost 17.47 points (0.29%) to 6,101.24, and the Nasdaq dropped 99.38 points (0.50%) to 19,954.30. Despite the day’s losses, all three indexes posted weekly gains.
Six of 11 S&P 500 sectors rose, led by communications services and utilities, with NextEra Energy up 5.2%. Tech was the weakest sector, with Nvidia down 3.1%, Microsoft falling 0.6%, and Tesla dropping 1.4%. American Express slid 1.4% despite strong earnings, and Boeing lost 1.4% on a $4 billion loss warning.
Advancers outpaced decliners on U.S. exchanges, with 14.02 billion shares traded, slightly below the 20-session average.
Oil prices rose slightly on Friday but posted a weekly loss, ending a four-week rally, following U.S. President Donald Trump’s call to increase domestic production and pressure OPEC to lower prices.
Brent crude gained 21 cents (0.27%) to $78.50 per barrel, while WTI increased by 4 cents (0.05%) to $74.66. However, both saw weekly declines of 2.8% and 4.1%, respectively.
Trump reiterated his demand for OPEC to cut oil prices to weaken Russia and end the Ukraine war. Analysts warned that U.S. sanctions on Russia and Iran could hinder Trump’s efforts, with OPEC maintaining its output plans.
Chevron’s $48 billion Tengiz oilfield expansion, adding 1% to global supply, and Trump’s rollback of environmental restrictions are expected to increase production but could lead to oversupply.
Concerns over Trump’s proposed tariffs on the EU, Canada, Mexico, and China added to market caution, raising fears about weaker global oil demand.
Despite short-term gains from a decline in U.S. crude stocks, oversupply and concerns about Chinese demand continue to pressure prices, analysts noted.
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