No fewer than 35 listed stocks on the Nigerian Exchange Limited (NGX) are fuelling the equities market’s rally this year. These stocks with minimum return of 100 percent have pushed the equities capitalisation up to N92trillion.
Interestingly, the 35 NGX listed stocks across key sectors have yielded impressive returns ranging from 100 percent to 500 percent, according to August 5 trading data. For instance, Beta Glass Plc has turbocharged the market this year with returns of 529.43 percent. Also, Champion Breweries has risen this year by 290.81percent, Honeywell Flourmills (+320.63percent), Nascon (+217.38percent), Vitafoam (+256.09percent), Ellah Lakes (+238.61 percent), and FTN Cocoa (+240.11percent).
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Other stocks that have risen remarkably this year are: Okomu Oil Palm (+136.49percent), Presco (+226.32percent), NGX Group (+156.88percent), SCOA (+142.72percent), UACN (+217.97percent), Custodian (+128.95percent), Mutual Benefits (+260.66 percent), NEM (+146.58 percent), UPDC (+274.21percent). While Lafarge Africa is up this year by 109.44 percent, Wema Bank share price has also increased this year by 172.53 percent.
Trading data also showed that the NGX Industrial Index has risen this year by 54.64 percent, NGX Banking Index (+48.11 percent), NGX Insurance Index (+37.37 percent), while NGX Oil & Gas Index is the only laggard this year with negative return of 10.35 percent.
Lower interest rates and upcoming earnings/dividend expectations have kept the mood in the market bullish. Specifically, consumer goods stocks are cumulatively fuelling the stock market’s rally this year of about 42percent year-to-date (YtD).
The NGX Consumer Goods Index has outperformed this year with 79.59 percent return as at August 5. It is followed by industrial, banking and insurance stocks while profit taking in oil & gas stocks is making the sector lag behind others.
While investors interest shifted toward sectors like Consumer and Industrial Goods, analysts at Lagos-based Meristem see considerable headroom for further repricing, “particularly within the banking sector and the industrial and consumer goods sectors, which continue to benefit from favourable valuation multiples and sector-specific tailwinds”.
While Vetiva analysts advise investors to exercise some level of caution after the sharp run-up in the market, CardinalStone research analysts said that as the earnings season wraps up, “our focus will likely shift to the banking sector as the market awaits H1’25 earnings and interim dividend announcements.
The stock market has since the past three week maintained an upward trajectory, driven by sustained investor appetite for risk assets and strategic positioning in fundamentally undervalued tickers.
Looking at other stocks that have powered the market’s rally this year, it shows Cadbury has risen by 193.02percent, International Breweries (+149.55percent), Nigerian Breweries (+137.34 percent), Nestle (+116 percent), Northern Nigeria Flourmills (+112.19 percent), and Unilever (+142.79percent).
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Also, this year Fidson has risen by 183.23 percent, Neimeth (+236.24percent), CWG (+127.92percent), Tripple Gee (+109.76percent), MTNN (+140 percent), ABC Transcorp (+297.56percent), Academy Press (+198.33percent), Caverton (+190.95 percent), NAHCO (+141.04 percent), Redstar Express (+181.18percent), and Skyway Aviation Handling Company (+169.21percent).
At the close of trading on Tuesday, the Nigerian Exchange Limited (NGX) All-Share Index (ASI) and Market Capitalisation increased to 144,796.37points and N91.608trillion.
“Looking ahead, market sentiment is expected to remain broadly positive as more corporates release their half year results and investors position for potential interim dividends. That said, some profit taking may emerge, particularly in stocks that have posted strong recent rallies.
“In addition, developments in the fixed income space, such as the outcome of upcoming bond auctions may influence short term portfolio rebalancing decisions,” Coronation Research analysts said in their August 4 note.
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