Resilient banking stocks buoy NGX amid broader market decline
The Nigerian Exchange Limited witnessed a mixed performance on its first trading day following the Christmas break, with banking stocks showing resilience in the face of a broader market downturn
The market opened to a bearish trend as the All-Share Index (ASI) and market capitalisation both fell by 0.34 percent, closing at 73,768.64 and N40.367 trillion respectively.
This decline nudged the year-to-date gain of the ASI down to 43.94 percent. Despite the overall market shedding a significant N139 billion in value, the banking sector index managed to buck the trend, posting a marginal increase to 889.15 from the previous 887.60.
Leading the charge in the banking sector was FCMB Group, which saw its stock rise by an impressive 4.79 percent. Other banks that contributed to the sector’s gains included Fidelity Bank with a 0.95 percent increase, Guaranty Trust Holding Company Plc up by 0.50 percent, and Jaiz Bank Plc, which soared by 8.75 percent. Unity Bank Plc also enjoyed a 2.50 percent appreciation in its shares, while Zenith Bank and Access Holdings Plc saw more modest gains of 0.26 percent and 0.22 percent, respectively.
On the other hand, not all financial institutions enjoyed positive results. Stanbic IBTC Holdings experienced a significant drop, with its share value declining by 6.01 percent.
Sterling Financial Holdings Company Plc and FBN Holdings Plc also faced setbacks, losing 1.11 percent and 1.04 percent, respectively. United Bank for Africa’s shares dipped by 0.39 percent. Meanwhile, Ecobank Transnational Incorporated and Wema Bank maintained their ground, closing without any change.
The mixed performance highlights the banking sector’s resilience and its potential as a stabilising force in the Nigerian stock market amidst broader economic challenges. Investors and market watchers will be keeping a close eye on these developments as trading continues in the new year.
Market breadth, which is the measure of investors’ sentiment, was positive resulting in 40 gainers and 21 losers.
During trading, sell-offs were observed in stocks such as UAC Nigeria, DEAPCap, Caverton, Royal Exchange and Tantalizer, as their respective share prices dropped by 10 percent, 7.25 percent, 6.59 percent, 6.25 percent and 6.12 percent.
Trading activity improved as the total deals and traded volume increased by 40.55 percent and 2.27 percent to 8,901 trades and 432.91 million units, whilst the traded value declined by 21.99 percent to N12.94bn.
Sector-wise, investor sentiment was positive. The Insurance index led gainers with a 3.06 percent increase, followed by the Oil/Gas and Banking indexes with a gain of 0.24 percent and 0.17 percent respectively.
However, the Consumer and Industrial Goods sectors experienced declines of 0.15 percent and 1.10 percent due to sell-offs.
After the trading session, Jaiz Bank emerged as the most traded security by volume with 35.38 million units worth N58.74 million, changing hands in 203 trades, while Geregu led in traded value at N6.06bn.
The gainers were led by stocks of Eterna, Axa Mansard, and Multiverse TERNA, with 10 per cent, 9.96 percent, and 9.95 percent gains respectively.
Meanwhile, fears of a run on the banks in some quarters didn’t materialise. There had been concerns that in the aftermath of the Central Bank of Nigeria special investigator report which alleged that the former CBN governor, Godwin Emefiele, used his cronies to acquire some banks including Keystone Bank, Polaris Bank and Union Bank, customers would be queuing to withdraw their money.
The report went on to advise the Federal government to take over the banks, strengthen them and sell them off.
