Emmanuel OchayiInvestor interest in the Nigerian stock market surged on Monday as many stocks reached attractive re-entry points. The Nigerian Exchange Limited (NGX) recorded a notable increase in buy-side activity after weeks of decline.
After recent underperformance at the Lagos Bourse, investors are now focusing on stocks with strong fundamentals, particularly those with favourable corporate actions and strong earnings reports. Market analysts suggest this renewed interest could support a gradual recovery in the coming weeks.
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Last week, the Nigerian stock market lost about N532 billion due to sustained sell pressure. However, Monday’s trading session showed signs of recovery. The NGX All-Share Index (ASI) rose from 104,962.96 points to 105,551.39 points. Similarly, market capitalisation increased from N65.819 trillion to N66.188 trillion.
READ ALSO: Nigeria’s Stock Market Faces N532bn Loss In One Week Amid Sell Pressure
The gains were driven by investors looking for undervalued stocks with strong earnings prospects. Analysts believe that companies expected to release positive earnings reports could further boost investor confidence.
Key Stocks Record Significant Gains
Several stocks recorded notable price increases. Livestock Feeds led the gainers, rising from N8.41 to N9.24, marking a 9.87% increase. Abbey Mortgage Bank also saw a strong performance, moving from N3.60 to N3.95, gaining 9.72%. Sunu Assurances rose from N4.99 to N5.45, adding 9.22%.
These gains reflect growing investor confidence in stocks that have shown resilience despite market volatility. Banking stocks also remained actively traded, with Zenith Bank, FCMB Group, UBA, Access Holdings, and Fidelity Bank seeing significant transaction volumes.
Analysts Expect Positive Trend in Stock Market
Market analysts predict a continued positive trend in the stock market. Futureview Research analysts noted that the market is expected to maintain an upward trend, driven by renewed investor interest in undervalued stocks.
They emphasised that favourable corporate actions and strong earnings reports could boost market sentiment and support recovery. CardinalStone Research, in their Model Equity Portfolio report, highlighted that upcoming earnings releases and dividend announcements from banks could influence market movements.
“We will monitor proceedings to identify attractive entry and exit opportunities for these stocks. We will not hesitate to adjust our portfolio to ensure optimal positioning,” CardinalStone Research stated.
Market Sentiment Remains Mixed
Despite the recent recovery, some analysts warn that caution is still needed. United Capital Research noted that while investors are positioning for the 2024 earnings season, high interest rates in the fixed-income market could sustain bearish sentiments.
The research firm explained that although corporate earnings and dividend declarations may attract investors, elevated interest rates in the fixed-income market could limit overall market growth.
Stock Market Outlook for Investors
Investors are now closely monitoring earnings reports and dividend declarations to determine their next moves. With the stock market showing signs of recovery, many are looking for opportunities in undervalued stocks with strong fundamentals.
The coming weeks will be crucial in determining whether the market can sustain its current momentum or if external factors such as interest rates will impact overall performance. Analysts advise investors to remain cautious while seeking strategic opportunities in the 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.
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