First Bank Leads Market Rebound as Nigerian Stocks Gain N333 Billion
The Nigerian Exchange Limited (NGX) closed Tuesday's trading session on a positive note, recording significant gains driven by renewed investor confidence in banking and industrial goods stocks. The market's performance marked a notable recovery from previous sessions, with First Bank emerging as a key driver of the upward movement.
Market Performance Highlights
The NGX All-Share Index (ASI) rose by 516.94 points to settle at 165,901.57 points, representing a 0.31% increase from the previous session's close of 165,384.63 points. This upward movement pushed the year-to-date return to an impressive 6.61%, reflecting sustained positive momentum in the Nigerian capital market.
Market capitalization experienced a substantial boost, increasing by N333 billion to reach N106.495 trillion from N106.162 trillion recorded in the previous trading session. This significant gain demonstrates renewed investor appetite for Nigerian equities despite broader economic challenges.
Sectoral Performance Analysis
The banking sector led the market recovery with its index rising by 1.32%, followed closely by the industrial goods sector which gained 0.69%. These two sectors provided the primary momentum for the overall market advance, offsetting losses recorded in other segments of the exchange.
However, not all sectors participated in the positive performance. The insurance index declined by 1.32%, while consumer goods and energy indices fell by 0.23% and 0.17% respectively. This mixed sectoral performance highlights the selective nature of current investor sentiment in the Nigerian market.
First Bank's Strong Recovery
First Holdco PLC, the parent company of First Bank, demonstrated remarkable resilience by bouncing back strongly from previous losses. The financial institution's share price rose significantly to N44.35 from N41.05, representing one of the most notable individual stock performances during the trading session.
This recovery positions First Bank as a key player in the banking sector's overall positive performance and suggests renewed investor confidence in one of Nigeria's oldest and most established financial institutions.
Market Breadth and Trading Activity
Market breadth closed positive with 35 stocks gaining ground compared to 34 decliners, reflecting a balanced but slightly bullish investor sentiment. The positive market breadth indicates that while gains were widespread, they were not overwhelmingly dominant across all listed securities.
Trading volume experienced a slight decline of 3.46%, with 736.4 million shares valued at N24.7 billion exchanged in 46,026 deals. Interestingly, while the number of deals fell by 16.88%, the value of trades increased by 34.24% compared to the previous session, suggesting larger transaction sizes despite reduced deal frequency.
Top Performers and Decliners
Leading gainers during the session included:
- Industrial and Medical Gases Plc with a 10.00% gain to close at N34.65
- Union Dicon Plc rising 10.00% to settle at N9.90
- Zichis Plc advancing 10.00% to N5.06
- Austin Laz Plc climbing 10.00% to N4.07
- RT Briscoe Plc appreciating 9.95% to close at N9.50
Major decliners included:
- Omatek Plc falling 10.00% to N2.43
- Cutix Plc dropping 10.00% to N3.15
- Union Homes Plc declining 9.95% to N76.90
- Sunu Assurances Plc losing 9.94% to N4.62
- Deap Capital Management Plc shedding 9.93% to N7.62
Trading Volume Leaders
GTCO led trading activity by volume with 65.9 million shares valued at N6.5 billion, followed by Chams Plc with 55.7 million shares worth N249.8 million. Custodian Investment Plc recorded 49.8 million shares valued at N2.2 billion, while Universal Insurance Plc traded 36.1 million shares worth N51.5 million. Zenith Bank Plc exchanged 35.4 million shares valued at N2.6 billion, rounding out the top five by trading volume.
Economic Context and Currency Valuation
The stock market's positive performance comes amid ongoing discussions about Nigeria's currency valuation. According to Bismarck Rewane, managing director of Financial Derivatives Company, the naira remains undervalued by approximately 11% based on purchasing power parity estimates. Rewane suggested that the current fair value of the naira should be around N1,256.79 to the dollar, indicating potential for currency appreciation that could further boost investor confidence in Nigerian assets.
The market's resilience demonstrates continued investor interest in Nigerian equities despite broader economic challenges, with banking and industrial stocks leading the charge toward recovery and growth in the capital market.
