Nigerian equities earned more than N981 billion in net capital gains in the past seven trading sessions, making Nigerian stocks some of the most lucrative in the global stock markets.

Benchmark indices for the Nigerian stock market yesterday rode on the back of increased demand across several sectors of the market to a year-to-date return of 4.

The sustained bullish rally at the Nigerian stock market underlined a positive, though cautious, outlook for the equities by several pundits after the Nigerian market sustained a two-year consecutive positive return.

The continuing rally has built up the net capital gains for investors since 2020 to more than N8.

Nigerian equities had over the past 24 months posted a two-year average return of 56.1 per cent, equivalent to net capital gains of N7.76 trillion over the past two years.

The stock market closed in 2021 with an average return of 6.07 per cent, equivalent to net capital gains of N1.278 trillion.

It had in the throes of the outbreak of the COVID-19 pandemic in 2020 recorded an average return of 50.03 per cent, representing net capital gains of N6.483 trillion.

Yesterday, investors raked in N403 billion in net capital gains amidst bargain-hunting for large-cap blue chips and value stocks. The benchmark index showed an average return of 1.7 per cent.

The strong rally yesterday was driven by influential stocks such as Dangote Cement, Seplat Energy; Guinness Nigeria; BUA Foods and MTN Nigeria Communications.

Dangote Cement, Nigeria’s most capitalised quoted company, yesterday announced that it would be buying back 170 million shares from shareholders between next Wednesday and Thursday.

The second tranche of the share buyback programme would see the company mopping up one per cent of its current issued share capital

Analysts at Afrinvest Securities said they “anticipate that bargain hunting would persist on improved investor sentiment”.

The All Share Index (ASI) of the Nigerian Exchange (NGX), a value-based common index that tracks all share prices at the NGX, closed yesterday at 44,608.82 points as against its opening index of 43,859.30 points. It had opened the year at 42,716,44 points

The aggregate market value of all quoted shares at the NGX rose from its opening value of N23.631 trillion to close at N24,034 trillion. It had opened the year at N22.297 trillion.

The total turnover of trades yesterday stood at 266.3 million shares valued at N3.8 billion in 4,502 deals.

All sectoral indices closed positive with the exception of the NGX Insurance Index, which dipped by 0.5 per cent. The NGX Industrial Goods Index led with a return of 3.1 per cent.

The NGX Oil & Gas Index rose by 1.4 per cent. The NGX Banking Index posted an average gain of 0.4 per cent while the NGX Consumer Goods Index appreciated by 0.1 per cent.

Dangote Cement rose by N16 to close at N275. Seplat Energy appreciated by N20 to close at N690. Guinness Nigeria rallied N1.20 to close at N42.20. BUA Foods added N1.65 to close at N66 while MTN Nigeria Communications chalked up N4 to close at N190 per share.

Most market pundits have predicted a continued rally at the stock market despite emerging political risks.

Analysts at Cordros Capital said the outlook for the Nigerian equities is bullish in the near term.

“In the near term, we believe positioning for 2021 full year dividends will continue to support buying activities in the market even as institutional investors continue to search for clues on the direction of yields in the fixed income market,” Cordros Capital stated.

President, Chartered Institute of Stockbrokers (CIS), Mr Olatunde Amolegbe, said two years of positive returns show that the market is reflecting its function as the barometer for the economy.

“We also expect the positive movement for the first half of 2022 on the back of good corporate performance, implementation of some part of the Petroleum Industry Act (PIA) and intense focus on infrastructural development and resultant increased capital raising by government and corporate entities,” Amolegbe said.

According to him, the implementation of the PIA has the potential to raise government revenue, which may elicit a positive response from the market while infrastructural development would likely boost market activity.

“These, however, depend on stable macroeconomic policy, increased security and stable polity,” Amolegbe, who doubles as Managing Director of Arthur Steven Asset Management Limited said.

Managing Director, APT Securities and Funds, Mallam Kasimu Garba Kurfi, also said the market would remain positive in 2022, although the second half would be determined by the politics of succession by the largest political parties.

“We expect the bullish rally to continue in first and second quarters but the continuity to the third and fourth quarters depends on the outcome of the primary election of the APC and PDP if they are able to succeed in electing the right candidates for the presidency.

“Acceptability will lead to bullish rally throughout the year, otherwise, the market may suffer a reversal,” Kurfi said.

Group Head, Research, GTI Capital Group, Mr. Emmanuel Onoja, said there was a strong possibility of the market running through a third positive year.

“It’s most likely we see the third year of positive return given the potential liquidity buildup next year as a result of increased borrowing, election spending and falling yields,” Onoja said.