Q1 Corporate Earnings: Investors Bargain Hunting Lifts Stock Market by N486bn

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Kayode Tokede 

Following the release of some corporate earnings for first quarter (Q1) ended March 31, 2022, investors bargain hunting in some fundamental stocks lifted the Nigerian Exchange Limited (NGX) northward with its week-on-week (WoW) growth in market capitalisation reaching N486billion.

So far, BUA Cement Plc, Stanbic IBTC Holdings, among others have released Q1 2022 unaudited results that showed impressive growth in profit as investors taking position was the overarching theme during trading activities last week ahead of more Q1 2022 corporate earnings releases. 

Notably, investors’ buying interest in Guinness Nigeria Plc that rose by 17.5 per cent, Lafarge Africa Plc 10.6 per cent, Airtel Africa, 4.7 per cent and Seplat Petroleum, 4.6 per cent supported the stock market N486 billion growth last week. 

The market capitalisation closed trading last week at N26.125 trillion after trading for four-day from N25.639 trillion it opened for trading, while the NGX All-Share Index appreciated by two per cent or 949.27 basis points to close at 48,459.65 from 47,510.38 basis points it opened for trading. 

Consequently, the stock market in its Month-till-Date (MtD) and Year-till-Date (YtD) return increased to 3.2 per cent and 13.4 per cent, respectively. 

Across NGX indices, the Oil and Gas added 6.4 per cent, Consumer Goods gained 3.3 per cent, as the Industrial Goods increased by 1.7 per cent, and Banking index gained 0.6 per cent, while the Insurance dropped by 0.1 per cent, the sole loser.    

According to the NGX weekly report, a total turnover of 1.302 billion shares worth N17.813 billion in 20,212 deals was traded last week by investors on the floor of the Exchange, in contrast to a total of 1.247 billion shares valued at N22.372 billion that exchanged hands in 23,406 deals prior week’s trading activities. 

The report added that, “The Financial Services Industry (measured by volume) led the activity chart with 836.781 million shares valued at N6.007 billion traded in 9,527 deals; thus contributing 64.28per cent and 33.72% to the total equity turnover volume and value respectively. 

“The Oil and Gas Industry followed with 86.909 million shares worth N1.243 billion in 1,770 deals. The third place was The Consumer Goods Industry, with a turnover of 86.286 million shares worth N2.225 billion in 3,056 deals.

“Trading in the top three equities namely Fidelity Bank Plc, Zenith Bank Plc and Universal Insurance Plc (measured by volume) accounted for 279.507 million shares worth N2.627 billion in 2,504 deals, contributing 21.47per cent and 14.75per cent to the total equity turnover volume and value respectively.”

According to analysts at Cordros securities, “In the week ahead, we expect the NGX’s floor to be flooded with results as the Q1 2022 earnings season commences in full swing.

“Thus, the local bourse is likely to close positive next week as we expect decent earnings releases across the board to temper selling activities by investors reluctant to leave gains in the market. Notwithstanding, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings.”



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