Stocks on Wednesday rose by the most in nearly eight months to its highest level since July, after Bellwether Dangote Cement gained 9.33 percent in the day.
The main equity gauge closed at 28,562.48 index point crossing 28,000 mark for the first time since July 12, 2019 while the market’s 3.54 percent surge was the most since the eve of President Buhari’s inauguration for a second term.
Lagos bourse has now extended its bull-run since boxing day to a record eight trading sessions which is the longest since early February 2019.
An early loss has characterised the first five trading days of every New Year since 2013, at least. 2020 has so far been an exception.
“The local institutional investors can’t sustain this bullish momentum,” tweeted Ayo Ebo, Managing Director of Afrinvest Securities Limited. “I think profit taking may set in before Friday.”
Stocks now have a 6.41 percent year’s return in 2020. Last year, the market declined almost 15 percent to extend a decline that began in 2018.
Read also: Over N800bn gain year-to-date places Nigeria stocks as world’s best
The surge in the market mid-week followed a rise in oil price after US’ killing of Iran’s top General in a drone attack.
On Monday Brent touch the $70 per barrel mark for the first time since May 2019 as the benchmark crude gained 1.9 percent in early trade to as high as $ 70.67 per barrel although pressure on price has eased.
Brent declined 1 percent to $67.59 per barrel around the close of trade on the Nigerian Stock Exchange.
With rates crunching down in the Nigerian Treasury Bills, and large OMO maturities in the first quarter of 2020, analysts expect some funds to be channeled into the equity market.
However, bargain hunters seem to be behind the current rally in the stock market.
At the end of trading on Wednesday, Dangote led the gainers’ chart with 9.33percent gain, Presco ( 8.00percent) Okomu(6.19percent) Stanbic ( 6.25percent) while oil- giant, Total led the losers’ chart 3.52percent, Unilever ( 2percent) While oil-giant, Total led the losers’ chart by 3.52percent, Unilever, UAC also made the list.
Outlook for 2020 favours the Nigerian equities market according to United Capital analysts is for a rebound for the undervalued market.
Analysts at the Lagosbased investment bank in an outlook report said they expect the Nigerian Stock Exchange, which has declined for the last two consecutive years, to return 5.3 percent in 2020.
