Emmanuel OchayiAradel Holdings Fuels Stock Market Rally
The Nigerian Stock Market experienced a strong rally in oil and gas stocks following the listing of Aradel Holdings on the Nigerian Exchange (NGX) on Monday, October 15. Aradel’s shares rose by 10 percent on the first day, closing at N772.90. This marked the beginning of a bullish trend for the stock market, particularly for the oil and gas sector.
By 1:30 pm the next day, Aradel Holdings had gained an additional 6 percent, reaching N820 per share. This increase made Aradel Holdings the fourth most expensive stock on the NGX, trailing behind Seplat, Airtel Africa, and Nestle Nigeria.
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Aside from Aradel Holdings, other oil and gas companies such as Oando Plc and Eterna Plc also saw significant gains. Oando’s share price rose by 4.45 percent, closing at N75.10, while Eterna Plc appreciated by 4.86 percent, ending the day at N25.90.
“The oil and gas sector has been seeing strong interest lately, especially with Aradel Holdings’ listing,” said a stockbroker at NGX. “Investors are optimistic, and this is driving the stock market in the short term.”
Though Seplat, a major player in the oil and gas sector, did not record any price change, it was one of the most traded stocks by value, with N1.15 billion worth of Seplat shares changing hands by early afternoon.
Aradel Holdings Boosts Market Capitalization
Aradel Holdings’ entry into the stock market boosted the NGX’s market capitalization by N3.05 trillion. Traders noted that Aradel’s performance on its first two days was a key driver behind the market’s overall positive performance.
However, the stock market’s gains were uneven. As of 1:30 pm, although the market was showing positive momentum, the overall market breadth remained negative. About 25 stocks had posted losses compared to 17 that recorded gains.
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Broader Market Performance
Market analysts remain cautiously optimistic. “It’s clear that Aradel and other oil and gas stocks are driving the rally,” an analyst explained. “But we can’t ignore that the broader market is seeing more losses than gains right now. It’s important to watch how this develops over the next few days.”
At the time of reporting, N18 billion worth of Aradel shares had been traded, while Oando saw N553 million worth of its shares traded. The broader market performance, however, was not as bright. The ongoing rally in oil and gas may not fully counterbalance the losses seen across other sectors.
In addition to the high trading values, the rising share prices in the oil and gas sector are giving investors some confidence, but the negative market breadth is a sign of caution. Many will be watching to see if Aradel’s strong start can continue to lead the stock market rally or if other sectors can begin to recover from their losses.
What Lies Ahead for the Stock Market?
With Aradel Holdings leading the charge, oil and gas stocks are driving the current stock market rally. As of now, the stock market’s overall performance is positive due to the weight of these gains, but the broader picture shows more stocks posting losses than gains.
How long this rally will last and whether other sectors will follow suit remains to be seen. The coming days will be crucial in determining whether Aradel’s listing is a short-term boost or the beginning of a longer trend in the Nigerian Stock Market.
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.
