Emmanuel OchayiThe Nigerian stock market started the week on a strong note, rising by 0.22% on Monday as investors continued their search for value in the equities market.
With stocks like Champion Breweries, Okomu Oil Palm, and MRS driving the rally, the market gained N8 billion in value, pushing the All-Share Index (ASI) to new heights.
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Monday’s performance saw stocks like Champion Breweries and Okomu Oil Palm rise by the daily limit of 10%, contributing significantly to the positive movement. The rally followed a substantial N1.1 trillion capital gain from last week, which boosted the benchmark ASI above 100,000 points.
Lagos-based analysts at Vetiva Research had predicted a strong start to the week, with banks leading the way. Their forecast seemed to align with the market’s performance, as the ASI climbed from 101,129.09 points to 101,356.15 points, while the market capitalisation rose from N61.303 trillion to N61.440 trillion.
Investor Sentiment Drives Stock Market Activity
Investors remained active on Monday, with a total of 503,189,878 shares changing hands across 12,490 deals. Stocks such as GTCO, Japaul Gold, Zenith Bank, and Universal Insurance were highly traded during the day.
The increased trading volume reflects ongoing interest in undervalued stocks, as investors seek opportunities ahead of the year-end.
Stock Market Outlook: Continued Interest Expected
Meristem Research analysts expect the positive sentiment in the stock market to persist throughout the week. In their December 23 note, they suggested that investors will continue to focus on undervalued stocks as they position their portfolios for the new year.
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The anticipation of a Treasury bills auction later in the week is unlikely to impact the stock market negatively, with analysts expecting little to no effect on equities.
Fixed-Income Yields and Stock Market Performance
Despite the allure of attractive fixed-income yields, analysts believe that the equities market will continue to perform well this week.
Investors are expected to stay focused on capitalising on year-end opportunities, but they may also engage in some profit-taking on stocks that have experienced recent gains.
Market Maintains Momentum Amid Profit-Taking Possibilities
Although there is potential for profit-taking, analysts believe the overall momentum of the market will remain positive.
The consistent search for value and the ongoing interest in undervalued stocks are expected to support the market’s positive trend for the rest of the week.
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.
