Stock market investors earned N2.081 trillion in November despite national unrest and other macroeconomic challenges coupled with global economic uncertainty.
A review of last month’s market performance showed that the Nigeria Exchange Limited (NGX) benchmark all-equity index rose 8.72%, its best monthly performance since May 2022.
The index has ended a bearish trend, albeit with lower trading volume, but is still higher than the N2.7 trillion loss recorded in October, signaling an uptrend and a bullish relative return to the market. There is
Analysts argued that investors took advantage of the slump in share prices resulting from losses over the past few months and the resulting rise in dividend yields ahead of year-end seasonality.
It also followed demand for high-value stocks, particularly telecoms and industrial stocks, which had suffered losses in the past. Notably, positions were taken in stocks such as Airtel, MTNN, Dangote Cement, and BUA Cement, which combined to drive market capitalization higher.
Last month, NGX’s underlying metric, the Allshare Index, closed at 47,660.04 basis points on November 30, 2022, up 8.72% from its opening price of 42,716.44 points for the month.
Similarly, the market capitalization for this period increased by N2.081 trillion and closed at N25.959 trillion as of November 30, 2022.
Rising inflation and rate hikes by the Central Bank of Nigeria (CBN) despite mixed economic data, impressive third quarter (Q3), 2022 corporate earnings report, bond market commodities and bargains 2 Look for persistent investors to reposition for higher dividend yields in shorter time frame equity assets to achieve digit returns.
The index rose 8.72%, nearly recovering from a loss of 10.58% in October.
Meanwhile, the sectoral performance index ended mixed. For example, NGX Industrial, Premium, NGX 30, Main Broad and Banking rose 13.17%, 11.67%, 8.57%, 6.21% and 4.94% respectively.
On the price volatility chart, the oil and gas sector led the decline after falling 8.44%, followed by consumer goods, which fell 4.91%.
Unity Bank hit a new all-time high for November, rising 23.91% in market sentiment.
NEM Insurance’s Nigerian Exchange Group rose 18.98% month-on-month following impressive Q3 numbers and a meager share of shares outstanding after its share price climbed 20%.
Meanwhile, the worst performing stock was SCOA, which lost 39.43% of its opening price for the month. Guinness Nigeria fell 24% in an unimpressive first quarter earnings performance, while SUNU Assurance fell 22.86% in November.
Ambrose Omordion, Chief Research Officer at InvestData Consulting Limited, said of the stock market performance: Portfolio repositioning ahead of expectations in the midst of seasonal trends and financial market resets in December.
“This is in light of smart money looking to rotate positions as international market oil prices continue to fluctuate and dividend yields are attractive at the moment.”
He said a price correction at this stage of a market recovery would support upside potential, so profit-taking, a normal behavior in stock markets, is imminent.
This is inevitable, he added, because many stocks with sound fundamentals are still cheap and dividend yields on key blue chip stocks continue to look attractive despite recent gains.
