Emmanuel OchayiIn the midst of the ongoing ‘Santa Claus’ rally, the heavyweight stocks known as SWOOTs—companies with a market capitalization exceeding one trillion naira—have showcased an upsurge, marking a collective gain of N463bn in just a week on the Nigerian Exchange Limited (NGX).
“This sudden surge in the market is a testament to the investor confidence we’ve been observing,” remarked financial analyst, Dr. Grace Akande, emphasizing the significance of this market shift.
The collective might of Airtel, Dangote Cement, MTN Nigeria, BUA Cement, BUA Foods, Zenith Bank, Guaranty Trust Holding Company Plc, and indigenous energy firm Seplat Plc initiated the week with a market capitalization of N27.925tn.
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By the week’s closure, their combined valuation reached N28.388tn, a notable climb from the N25tn recorded as of August 2023.
“Zenith Bank and GTCO have been notable frontrunners, witnessing investment influx, resulting in remarkable year-to-date returns,” stated investment advisor, Samuel Ojo.
Zenith Bank and GTCO alone saw an increment of N25.117bn and N4.414bn in their market capitalization, reaching closing figures of N1.189tn and N1.178tn ahead of the Christmas break.
Airtel Africa and MTN Nigeria within the communications sector witnessed exceptional growth, with their stocks soaring by approximately N329bn and N104bn, closing at N7.093tn and N5.248tn respectively, making them standout performers among the SWOOTs during the review week.
Nevertheless, while BUA Cement, BUA Foods, Dangote Cement, and Seplat maintained stable closures, their year-to-date returns exhibited a mixed picture ranging from negative to over 200 percent, showcasing the varied market dynamics influencing these stocks.
Seplat’s induction into the N1tn market cap club notably coincided with a surge in oil prices, amplifying investor confidence and contributing to the company’s market valuation.
“Such milestones are indicative of a bullish market sentiment towards select high-value stocks,” commented market strategist, Esther Oluwatosin.
Reflecting on the trends, First Bank of Nigeria Holdings briefly achieved the N1tn milestone, registering a year-to-date return of 120.18 percent as of Friday, demonstrating the market’s appetite for certain banking stocks despite subsequent fluctuations in its market cap.
The surge in SWOOTs underscores a paradigm shift in investor preferences and affirms the evolving landscape of Nigeria’s stock market, offering promising prospects for both seasoned investors and newcomers alike.
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