Nigeria’s equity market rallies 6.23%, its highest in five years
By Samuel Bankole
Nigeria’s equity market rallied the most in more than five years on Thursday, forcing the Nigerian Stock Exchange (NSE) to trigger the circuit breaker for 30-minutes, the first time in four years since the local bourse introduced the automatic trading halt.
The main market All-Share Index (ASI) climbed 6.23 percent at the close of trading, its biggest rally since April 2015 as traders bought up shares in a hunt for assets with attractive yields.
The ASI closed at 35,342.46 points against 33,268.36 points it close at the end of trading on Wednesday.
The NSE halt trading for 30 minutes as the ASI hit the five percent growth on Thursday. the automatic 30-minute circuit breaker, which was introduced in 2016 was to ensure that trading is slow down to ensure that the market breathes a little.
The market cap of equities listed on the NSE increased to ₦18.468 trillion from ₦17.384 trillion as on the previous day.
The total volume traded closed with an exchange of 1,192.805 million units valued at ₦17.40 billion traded in 10,704 deals. The market breadth was positive with 65 gainers as against 8 losers.
The NSE 30 Index increased by 6.09 percent to close at 1,536.47 points as against 1,448.22 points as on the previous day.
Market turnover closed with traded volume of 794.39 million units. Julius Berger and Presco were the key gainers, while there were no losers.
Analysts said the surge in the local bourse was due to continue decline in the yeilds on fixed income, which came to the head at the primary market auction of Treasury bill on Wednesday.
The stop rates for the three tenors offered at the auction on Wednesday declined from levels closed at the Oct 28th auction.
The 91-day closed at 0.035 percent, 182-day closed at 0.15 percent while the 364-day closed at 0.3 percent at the auction due to overwhelming demand from investors, helped by increase liquidity in the market.
On the interbank market, the Overnight (O/N) lending rate declined by 0.30 percent to close at 0.75 percent from 1.05 percent on the previous day, while the Open Buy Back (OBB) rate also declined by 0.21 percent to close at 0.43 percent as against the last close of 0.64 percent.
Nigeria’s stock marker has become the best performing globally on the day among 93 benchmarks tracked by Bloomberg, and its 32 percent advance in 2020 is the strongest of any major equities gauge.
Bua Cement led the gains on Thursday, rallying 10 percent to close at N46.50 per share, trailed by shares of Zenith Bank plc, which closed up by 9.96 percent and N25.60 per share.
Stock of energy firm, Oando also rises 9.78 percent to close at N3.58, Dangote Sugar was up 9.77 percent to close at N19.45 a share, Fidelity Bank rose 7.72 percent to close at N2.82 per share.
Dangote Cement, which accounts for the fifth of the market cap also contributed most to Thursday’s gains, advancing 8.11 percent, Access Bank and United Bank for Africa rallied 7.53 percent and 7.14 percent to close N9.30 and N9.10 respectively.
Analysts, are however, projecting profit taking in the market in the coming days as investors take a breath from the five consecutive days of rally in the market to book profit.