The total market value of Nigerian stocks hit N30 trillion on Monday, amid the uncertainty surrounding the result of Saturday’s general election.
BusinessDay reported that Nigerian Exchange Limited All-Share Index and the market capitalisation of equities rised to 55,328.42 points and N30.14 trillion from preceding day’s low of 54,949.21 points and N29.93 trillion respectively.
The market gained around N207 billion or 0.68 percent increase, moving this year’s return by by an increase of 7.96 percent.
Although, the general election’s outcome uncertainty and Nigeria’s economic cash shortage are dampening investor sentiment and encouraging profit-taking, positive corporate earnings are encouraging stock buyers to maintain their optimistic outlook on dividend yields and capital appreciation in bellwether stocks.
Meanwhile, outcome of the election is a significant factor local and foreign investors are closely watching.
According to Business Day, analysts predicted a mixed session to start the week before the market opened, but they also predicted that investor sentiment would be influenced by the outcome of the elections.
Analysts at United Capital research said on Monday, “We expect the equities market to remain bullish despite post-election uncertainties. We foresee opportunities for the Buy side to increase holdings (in the near-term) on fundamentally sound stocks with improved valuation and dividend performance. Nonetheless, we still expect profit-booking activity for overbought stocks.”
The analysts said that with Nigerians struggle with multifaceted poverty, insecurity, severe inflation, and power outages, among other challenges, the most difficult task for Nigeria’s next president will be to save the world’s capital of poverty from the brink.
According to the analysts, “The next President must also fast-track industrialisation and diversification, improve investment-to-GDP, grapple with underperforming sectors and deliver a more competitive currency, and actual reform implementation.”
BusinessDay reported that the rise “came as investors in 3,186 deals exchanged 149,780,851 shares valued at N1.54 billion. Oando, Transcorp, Fidelity Bank, Chams and UBA were actively traded counters on Monday. Topmost on the buy-side of the bourse are stocks like Stanbic IBTC, Oando, C&I Leasing, Conoil and MRS.”
Meanwhile, analysts at Lagos-based Meristem Research predicts that traders will trade more cautiously this week because of the tense caused by the ongoing elections.
“Also, we expect investors to take profit on tickers that have appreciated significantly in recent weeks. However, we do not rule out the likelihood of bargain hunting by investors in a bid to position for dividends ahead of full-year earnings releases. Thus, we expect the market to close down, albeit marginally barring bargain hunting on heavy-weight tickers,” the Meristem analysts said.