Nigeria’s Equity Market Gains 0.64% As Seplat Energy, PZ, Others Shares Surge After Key Acquisition

Equity Market Starts Week Strong with Seplat Energy Leading

Nigeria’s equity market kicked off the new week on a positive note, gaining 0.64% at the close of trading on Monday. Investors focused heavily on buying shares of Seplat Energy Plc, PZ Cussons, and Champion Breweries, which significantly contributed to the market’s N376 billion increase.

Seplat Energy’s stock price was the standout performer, climbing from N5,217.20 to N5,738.20—a rise of N521 or 9.99%. The spike came after the federal government officially approved Seplat’s $1.28 billion acquisition of Exxon Mobil’s onshore assets, further boosting investor confidence in the equity market.

PZ Cussons also experienced a significant gain, with its share price rising from N19.70 to N21.65, up by N1.95 or 9.90%. Champion Breweries saw its stock price rise from N3.42 to N3.75, adding 33 kobo or 9.65%.

Positive Momentum in the Nigerian Equity Market

The Nigerian Exchange Limited (NGX) All-Share Index (ASI) and the equities market capitalization increased from the previous day’s 98,070.28 points and N59.425 trillion to 98,690.61 points and N59.801 trillion, respectively.

Investors exchanged 405,022,661 shares worth N27.568 billion across 8,281 deals, with notable trading in companies like UBA, Sterling, Access Holdings, Nigerian Breweries, and FCMB Group.

One market analyst at Vetiva, commenting on Monday’s performance, noted, “We expect market participants to react quickly to the latest earnings releases of listed firms across the NGX.” This was echoed in Vetiva’s report for October 21.

Equity Market Outlook: Buy Interest to Continue

The year-to-date (YtD) return in the equity market is now 31.99%, with a modest 0.14% increase this month. Despite some anticipated volatility, experts predict continued investor interest in undervalued stocks within the equity market.

Looking ahead, market analysts at United Capital expect a mix of bullish and bearish trends in the equity market. “We foresee sustained buy interest as investors target undervalued stocks. However, given the current sentiment that interest rates might have peaked in the fixed income and money markets, some bearish undertones may persist,” said United Capital’s report.

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Investors Eye Mid- to Long-Term Strategies in Equity Market

Fund managers and investors are expected to focus on mid- to long-term strategies, prioritizing equities with strong fundamentals and ongoing corporate actions. “For those with investment objectives spanning six months or more, cherry-picking sound equities in the market will help optimize portfolio returns,” added United Capital’s analysts.

The outlook for the market remains cautiously optimistic, with a focus on strategic investments. Investors will likely continue to navigate the market with a mix of caution and opportunity-seeking, particularly in light of recent developments, such as Seplat Energy’s significant acquisition and the potential for long-term growth in other undervalued stocks.

Trading Continues as Earnings Reports Influence the Equity Market

As the week progresses, more earnings reports are expected from firms listed on the NGX, which could further influence investor behavior in the equity market. Analysts believe these releases will play a pivotal role in shaping the market’s performance in the coming days.

“We expect further market movement once the earnings results from these companies are released. Investors are likely to make decisions based on the strength of these numbers,” said one equity market strategist.

The market remains in focus as key companies like Seplat Energy continue to attract investor attention, reinforcing the strong start to the trading week. With ongoing corporate actions and new earnings reports, the market is poised for further movement, driven by investor reactions and strategic decisions.