Emmanuel OchayiEquity Market Posts 0.62% Gain
Nigeria’s equity market ended its trading session on Tuesday with a 0.62% increase, marking its first gain this week.
The Nigerian Exchange Limited (NGX) All Share Index (ASI) rose from 96,206.46 points to 96,802.8 points, while the market capitalisation increased to N55.626 trillion, up from N55.282 trillion the previous day.
Join our WhatsApp ChannelThis growth comes as the market anticipates the Central Bank of Nigeria’s (CBN) treasury bills auction on Wednesday.
In the auction, existing treasury bills worth N161.88 billion are set to mature and will be rolled over. These include N6.78 billion in 91-day T-bills, N4.92 billion in 182-day T-bills, and N150.18 billion in 364-day T-bills.
Equity Market Sentiment Upbeat
Investors remain optimistic about the equity market’s future performance. “The positive movement in the equity market shows renewed investor confidence,” said a market analyst.
He added, “With the upcoming treasury bills auction, we expect more activity, especially in stocks like Oando and Access Holdings.”
The rise in the equity market’s key indicators reflects an overall year-to-date (YTD) growth of 29.46%. In Tuesday’s session, investors exchanged 406.19 million shares worth N13.31 billion in 12,241 deals. Oando, Access Holdings, Japaul Gold, FBN Holdings, and UBA were among the top-traded stocks.
READ ALSO: Nigeria’s Equity Market Sees 0.24% Decline As Investors Brace For Volatility
Key Stocks Lead the Equity Market Rally
Leading the rally were notable stocks like SFS REIT, which saw the highest gain of 9.98%, rising from N148.35 to N163.15.
Custodian Investment also recorded an 8.87% increase, from N12.40 to N13.50, while RT Briscoe moved from N2.82 to N3.10, gaining 28 kobo or 9.93%.
Speaking on the market’s outlook, a trader mentioned, “With the equity market gaining momentum, we’re likely to see more investors jumping in as they prepare for the CBN auction.”
Treasury Bills Auction Expected to Influence Equity Market
The CBN’s primary market auction (PMA) on Wednesday is anticipated to have a significant impact on the equity market.
As the market digests the auction outcome, analysts expect further volatility in equity prices, depending on the level of interest rates set during the auction.
“There’s always a close connection between the equity market and the fixed-income space,” said a financial analyst. “As interest rates on treasury bills are decided, we expect investors to react either by shifting more funds into equities or holding back, depending on how attractive the rates are.”
Investors are particularly keen to see how the auction will affect liquidity in the equity market, especially given the considerable size of maturing treasury bills.
This could provide further momentum for stock prices or lead to a short-term correction if rates are deemed too attractive for investors to pass up.
Outlook for Nigeria’s Equity Market
The equity market’s recent rally is seen as a positive sign, but much depends on the results of the treasury bills auction. If interest rates remain low, analysts predict that the equity market could continue to see gains in the near term. However, higher-than-expected rates could result in a shift towards fixed-income instruments, possibly slowing the market’s momentum.
Despite these uncertainties, market participants remain optimistic. “There’s a lot of opportunity for growth in the equity market,” one broker noted. “If the market maintains this pace, we could see even stronger performance by the end of the year.”
Tuesday’s 0.62% gain in the equity market signals growing investor confidence, but the outcome of the CBN treasury bills auction on Wednesday will play a key role in determining the direction of the market in the coming days.
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.
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