Stock Market opens June on a high, as NGX gains N179bn despite cautious outlook

By Seun Ibiyemi

Despite forecasts pointing to a mixed week for equities, Nigeria’s stock market began June on a strong footing, posting a 0.26 per cent gain on Monday, equivalent to N179 billion in market capitalisation.

The Nigerian Exchange Limited (NGX) All-Share Index (ASI) rose from 111,742.01 points to 112,026.24 points. Market Capitalisation followed suit, climbing from N70.462 trillion to N70.641 trillion.

Futureview Research had earlier projected a mixed performance for the week, with a slight bullish tilt buoyed by anticipated buying activity. The firm observed that investor positioning is likely to be swayed by the forthcoming Nigerian Treasury Bills Primary Market Auction, while interest in undervalued stocks could offer further support to the market.

Similarly, Vetiva Research, in a pre-market note, remarked that June could bring a blend of activity, as investors reassess their portfolios and look to take advantage of potential dividend flows. The firm noted that in the absence of decisive market drivers, activity could remain tepid, particularly amid low trading volumes.

Monday’s trading session saw 17,019 deals involving over 517.95 million shares, valued at N10.07 billion. Key stocks that shaped the day’s performance included Fidelity Bank, Royal Exchange, Access Holdings, Cutix, and United Capital.

Among the top gainers, Multiverse Mining stood out with a 9.87 per cent jump to close at N8.35. Livestock Feeds advanced by 9.57 per cent to N10.30, Lasaco rose 8.11 per cent to N2.80, and Neimeth increased by 8.06 per cent to N3.35.

According to CardinalStone Research, this week’s market sentiment will be guided by dividend-related activity, earnings updates, and markdowns on stocks that have just paid out dividends.

United Capital analysts also offered a cautiously optimistic outlook, expecting a mildly positive equities market driven by excess system liquidity and early investor positioning ahead of Q2 earnings reports. They observed that stocks with robust fundamentals, foreign exchange gains, operational efficiency, and prospects for interim dividends are likely to draw investor attention.

At the same time, they flagged potential headwinds such as upcoming NT-Bills and possible Open Market Operations (OMO) auctions, which may pull liquidity away from equities, especially given the attractive yields of around 24 per cent in the money market.

They further noted that investor appetite may be dampened by elevated inflation, high interest rates, continued depreciation of the Naira, and broader macroeconomic concerns. Retail investors are expected to continue booking profits from earlier gains, which could slow further upward movement.

“Investors are advised to prioritise fundamentally sound stocks with potential for interim dividends as market conditions evolve,” United Capital stated.