NGX Rallies, Forms Top Chart Pattern Amidst Profit Booking, Mixed Sector Performance

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The Nigerian Exchange (NGX) experienced a notable surge in market activity this week, reflecting a rise in investor confidence and heightened interest across multiple sectors. A total of 4.698 billion shares worth ₦85.043 billion were traded, marking a significant increase compared to the previous week, which saw 2.618 billion shares valued at ₦69.742 billion exchanged. The market recorded 72,562 deals, indicating a stronger investor presence and overall market momentum.

NGXASI Weekly Chart (Opening chart)

The Financial Services Industry once again led the charge, contributing 73.86% to the total equity turnover volume and 47.97% to the total value. A total of 3.470 billion shares worth ₦40.791 billion were traded within this sector, underscoring its dominance in the market. The Services Industry followed closely with 407.032 million shares valued at ₦2.226 billion, while the ICT Industry accounted for 237.680 million shares worth ₦3.628 billion. These sectors played significant roles in the overall market performance this week.

Wema Bank Plc, FBN Holdings Plc, and Universal Insurance Plc were the most actively traded stocks, collectively accounting for 1.679 billion shares valued at ₦20.838 billion, representing 35.74% of the total equity turnover volume and 24.50% of the total value. These stocks remained highly sought after and reflected the growing interest in these companies.

NGXASI Daily Chart

The NGX All-Share Index rose by 1.80%, closing the week at 105,451.06 points, while market capitalization increased to ₦64.303 trillion. This positive trend was bolstered by strong performances in key sectors such as Financial Services and ICT. However, several indices, including the Insurance sector, saw declines, with Insurance dropping by 6.91%, and other sectors such as AFR Bank Value, AFR Div Yield, and Consumer Goods also experiencing negative performance.

Multiverse Weekly Chart

In terms of stock performance, Multiverse Mining and Exploration Plc led the gainers with a 53.42% rise, closing at ₦12.35 from an opening price of ₦8.05. This increase was driven by strong demand for shares and optimism about the mining sector. Honeywell Flour Mill Plc followed, rising by 31.67%, from ₦7.61 to ₦10.02, which may have been attributed to the market’s positive view of its ongoing merger with Flour Mills of Nigeria. Daar Communications Plc, a media company, saw its stock appreciate by 25.71%, from ₦0.70 to ₦0.88, likely driven by renewed interest in its AIT brand.

In the telecom sector, MTN Nigeria Communications Plc experienced a 21.00% gain, closing at ₦242.00, up from ₦200.00. This increase was propelled by strong financial results and expanding broadband services. Similarly, NCR (Nigeria) Plc saw its stock rise by 20.66%, closing at ₦7.30 from ₦6.05, reflecting investor confidence in its innovative technology solutions.

Sunu Assurance Weekly Chart

On the other hand, the Insurance and Oil & Gas sectors faced significant declines. Sunu Assurances Nigeria Plc saw its stock price fall by 36.52%, closing at ₦7.30 from ₦11.50, likely due to sector-specific challenges. Caverton Offshore Support Group Plc, which provides services to the oil industry, recorded a 15.00% drop, closing at ₦2.38 from ₦2.80, as investor interest waned. Consolidated Hallmark Holdings Plc, another insurance company, saw its stock decline by 15.00%, closing at ₦3.40 from ₦4.00. Similarly, R.T. Briscoe Plc experienced a 14.33% drop, closing at ₦2.57 from ₦3.00, weighed down by sluggish market activity. Lastly, Jaiz Bank Plc saw a 10.77% decline, with its stock closing at ₦2.90 from ₦3.25, amidst continued sell-offs in the banking sector.

In conclusion, while the Nigerian Exchange experienced strong overall performance, driven primarily by gains in Financial Services and ICT, the Insurance and Oil & Gas sectors faced challenges, leading to declines in some stocks. Investors should remain vigilant, keeping an eye on market trends and corporate disclosures, to make informed decisions in this dynamic market environment.

Trending in the Economy

The Central Bank of Nigeria (CBN) reports a 19.23% increase in non-oil exports, reaching $0.62 billion in September 2024, up from $0.52 billion in August. This growth is attributed to higher earnings from agricultural exports, led by cocoa beans and urea. Brazil remains the top destination, accounting for 20.22% of total exports. The surge in exports is also driven by top exporters like Indorama Eleme and Dangote Fertilizer. The broader trend reflects Nigeria’s successful push to diversify away from oil dependence.

Global Market and Oil

Global stocks fell, and U.S. Treasury yields rose on Friday after stronger-than-expected jobs data, suggesting the Federal Reserve may keep interest rates higher for longer. Wall Street’s main indexes ended lower, with 10 out of 11 S&P 500 sectors in the red, especially financials, real estate, technology, and consumer staples, while energy stocks rose. All major indexes posted their second consecutive week of losses. The U.S. economy added 256,000 jobs in December, exceeding expectations of 160,000.

James St. Aubin of Ocean Park Asset Management noted that strong job growth could delay rate cuts, pushing yields higher. Markets now expect a Fed rate cut no earlier than June, instead of May. The yield on U.S. 10-year notes rose to 4.761%, its highest since November 2023. The Dow fell 1.63%, the S&P 500 dropped 1.54%, and the Nasdaq declined 1.63%. The Russell 2000, sensitive to interest rate changes, lost 2.22%. Global stocks, as measured by MSCI, dropped 1.39%, with the STOXX 600 down 0.84%, led by utilities and real estate. St. Aubin added that rising bond yields limit the chances of further rate cuts, despite January’s seasonal factors.

Oil prices surged nearly 3% to three-month highs due to U.S. sanctions on Russian oil and gas revenues. President Biden’s administration imposed new sanctions targeting Russian oil producers, tankers, and ports, aiming to disrupt Russian oil production and distribution. Brent crude rose 3.7% to $79.76 per barrel, and U.S. West Texas Intermediate crude gained 3.6% to $76.57 per barrel.

The sanctions are expected to hurt Russian oil exports to India and China, pushing them to seek alternatives. Additionally, increased demand for heating oil due to extreme cold in the U.S. and Europe supported prices. U.S. ultra-low sulfur diesel futures jumped 5.1% to $105.07 per barrel, the highest since July, with analysts predicting a 1.6 million barrel-per-day increase in global oil demand in early 2025.

NGX Sectorial Charts and Others

NGX Banking Index Weekly Chart