Emmanuel Ochayi
Nigeria’s stock market saw a significant rise in the trading week that ended on Friday, January 31, as investors gained about N1.063 trillion.
The Nigerian Exchange Limited (NGX) All-Share Index (ASI) grew by 0.87%, moving from 103,598.3 points to 104,496.12 points. Market Capitalisation also increased from N63.645 trillion to N64.708 trillion.
Join our WhatsApp ChannelCorporate Announcements Drive Market Performance
Market analysts say corporate earnings and key announcements were the major factors influencing stock market performance during the week. While some investors took profits, others continued to make bargain purchases.
Coronation Research analysts explained the market movement in their January 30 report. They stated, “Important to note also, is the Up/Down (UD) ratio of 0.51x that signals weak buying pressure relative to selling (after taking the volume of the intensity of price movements into consideration). This hints at potential profit-taking or consolidation in the near term. While bullish momentum persists, a short-term pullback or sideways movement is possible before another leg up.”
Investors Focus on Dividend-Paying Stocks
As companies continue to release earnings reports, investors are turning their attention to dividend-paying stocks. Analysts believe this trend will remain strong as more companies announce their financial results.
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An investment expert stated, “Investors are positioning themselves in stocks that are likely to offer high dividend payouts. This is typical during the earnings season as traders seek to maximize returns.”
Mixed Performance Across Sectors
The stock market showed a mixed performance across different sectors. Consumer goods, banking, and oil & gas stocks saw strong demand, while insurance and industrial stocks faced selling pressure.
A stock trader explained, “We saw increased interest in banking and consumer goods stocks, which are known to perform well during earnings season. On the other hand, industrial stocks did not attract as much buying interest.”
Market Returns Turn Positive for 2024
Despite mixed trading sessions, the stock market ended the week on a positive note. The year-to-date (YtD) return moved back into positive territory, closing at +1.53%.
A financial analyst commented, “The market has shown resilience despite fluctuations. Investors are optimistic, especially as more companies release earnings. This has boosted confidence in the stock market.”
What Lies Ahead for the Stock Market?
Market analysts expect continued activity as earnings season progresses. While there may be some profit-taking, the focus remains on stocks with strong fundamentals.
An investment manager shared his outlook, “We anticipate that the stock market will maintain its current momentum, especially with investors looking for stocks with strong dividend prospects. However, short-term fluctuations are likely.”
As trading resumes in February, investors will be watching corporate earnings closely to make informed decisions. The stock market’s direction in the coming weeks will depend on how companies perform and the economic outlook for the country.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
