Investors on the Nigerian Stock Market on Tuesday gained N374.9 billion as oil prices maintained its longest bullish run in 9 months. All Share Index (ASI) rose by 3.12% due to significant appreciation in the prices of the two most capitalized companies on the Nigeria Stock Exchange (NSE).
Dangote Cement Plc (NSE ticker – DANGCEM) share price rose by 10.00% to close at N143.00 per share while that of MTN Nigeria Plc (NSE ticker – MTNN) increased by 3.45% to close at N120.00. DANGCEM AND MTNN has a market capitalisation of N2.436 trillion and N2.442 trillion respectively (Almost 40% of the Market Capitalisation).
In addition to the duo, Nestle Nigeria Plc (NSE ticker – NESTLE) share price advanced by 5.96% to close at N975.00. NESTLE has a market capitalisation of N772.8 billion.
Investor sentiment on the exchange on Tuesday is strong at 4.1x with twenty nine (29) stocks advancing in prices with only nine (9) stocks declining in prices. The return of activities to the market can largely be attributed to rising oil prices, deemed highly favourable for the Nigerian economy which is heavily dependent on oil.
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On Tuesday, Oil prices maintained its upward trend after shrugging off the perceived trade war between U.S and China. As countries around the world including, U.S, France, Italy, Germany, Nigeria, India, and South Africa began to gradually ease the lockdown imposed due to Coronavirus pandemic, demand for oil is set to improve as the world would like to believe that the worst is over.
Oil benchmark, brent crude advanced by more than 10% to over $30 per barrel on Tuesday. Western Texas Intermediate (WTI) also rose by more than 17% to sell above $24. Nigeria Banner oil Bonny light is traded at $18.94 per barrel.
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Thus, investors who have been sitting on the fence, might have decided to jump in and buy blue chip stocks at attractive prices. The activity level improved significantly as the volume and value of stock traded on the floor of the exchange rose by 38.15% and 77.45% respectively. However, the no deals of declined by 28.28%
345.17 million units of shares, valued at N4.25 billion exchanged hands in 4,689 deals on Tuesday, compared to 249.86 million units of shares valued at N2.396 billion traded in 6,538 deals on Monday.
ASI and market capitalisation stood at 23,809.31 and N12.408 trillion respectively, a 3.12% increase from 23,089.86 and N12.033 trillion on Monday respectively.
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All the indices under our watch, closed positively, except the insurance index, which declined by 0.32%. The Banking Index and Consumer Goods Index appreciated by 2.42% each, whereas the Industrial and Oil & Gas Index appreciated by 1.56% and 0.73% respectively.
Guaranty Trust Bank (NSE ticker – GUARANTY) is the most traded stock by both volume and value. 54,287,115 shares of GUARANTY worth N1,140,074,483.85 exchanged hands in 451 deals on the floor of the exchange.
Top three gainers are Dangote Cement Plc (DANGCEM), Neimeth International Pharmaceuticals Plc (NEIMETH), Prestige Assurance Plc (PRESTIGE) which appreciated by 10.00%, 9.26% and 9.09% respectively to close at N143.00, N0.59 and N0.6 respectively.
On the decliners table, the top three are May & Baker Nigeria Plc (MAYBAKER), NPF Micro Finance Bank Plc (NPFMCRFBK), and Linkage Assurance Plc (LINKASSURE) which declined by 10.00%, 9.60% and 9.43% respectively to close at N2.43, N1.13 and N0.48 respectively.
Despite the turn around in the oil prices, there is still the situation of the increasing cases of Covid-19 in Nigeria which presents some level of uncertainty. Thus, analyst at Investogist still maintain our negative outlook on the market in the short and medium term.
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