Emmanuel OchayiNigeria’s equity market moved into positive territory on Tuesday, gaining 0.65% as investors showed interest in stocks such as Eterna, Ikeja Hotel, and Honeywell Flour Mills. The market added N426 billion, lifting the Nigerian Exchange Limited (NGX) All-Share Index (ASI) from 105,891.33 points to 106,574.98 points. Market capitalisation also rose from N66.069 trillion to N66.495 trillion, bringing the year-to-date (YtD) return to 3.54%.
Analysts Expect a Positive Month for the Equity Market
Investment analysts at Meristem Research have projected continued growth in the equity market, driven by upcoming corporate earnings reports. In their latest market insight, they stated, “For February, we foresee a sustained positive bias with occasional volatility. In our view, expected corporate earnings releases will spur market activity during the month as investors seek to capitalise on tickers with positive earnings performance and position for dividend payments. As such, we anticipate continued rotation into high-performing sectors.”
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According to them, macroeconomic factors will also play a role in shaping investor sentiment. They explained, “However, investors may – in varying magnitudes – react to movements in macroeconomic indicators, particularly inflation and Monetary Policy Committee decisions during the month, which could potentially dampen or spur sentiment towards equity assets. Overall, we expect a generally bullish outlook for the Nigerian equities market.”
Investor Focus on Dividend-Paying Stocks
As companies prepare to release their financial results, analysts are advising investors to focus on stocks that offer attractive dividend yields. The Meristem report further noted, “As we anticipate corporate earnings releases to influence equities market activity in February, our investment strategy is to take positions on dividend-paying tickers, particularly those poised to deliver attractive dividend yields. Also, we consider tickers with sufficient upside potential in favourable sectors.”
Top Gainers in the Equity Market
Eterna Plc recorded the highest price increase, rising from N40.30 to N44.30, an increase of N4 or 9.93%. Ikeja Hotel also gained, moving from N12.35 to N13.50, adding N1.15 or 9.31 percent.
Honeywell Flour Mills saw a price increase from N10.47 to N11.51, up N1.04 or 9.93 percent.Ellah Lakes also posted strong gains, rising from N3.30 to N3.63, adding 33 kobo or 10 percent.
Active Trading in the Equity Market
The day’s trading session saw high activity, with stocks like Access Holdings, Transcorp, Veritas Kapital Assurance, AIICO, and Zenith Bank being actively traded. A total of 478,607,440 shares worth N11.76 billion were exchanged in 15,561 deals.
Outlook for the Equity Market
With investor interest increasing and corporate earnings set to be released, market experts expect continued activity in the coming weeks. Analysts believe that investors will continue to focus on stocks that offer high returns, particularly in sectors with strong earnings potential. However, they also note that macroeconomic factors such as inflation and monetary policy decisions could influence market sentiment.
The equity market’s performance on Tuesday reflects growing investor confidence, and with earnings season approaching, market activity is likely to remain strong.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
