Improved earnings, dividend payment lift investors’ fortune by N180 billion
By : Helen Oji
Nigerian Stock Exchange NSE
Capital market. Photo: SHUTTERSTOCK
Strong first-quarter 2025 earnings and a steady stream of full-year 2024 dividend announcements have continued to buoy investor confidence on the Nigerian Exchange, driving market capitalisation up by roughly N180 billion over the past week alone.
The all-share index (ASI) extended its winning run, climbing 0.27 per cent to close at 106,042.57 points, a testament to the broad-based enthusiasm generated by better-than-expected corporate results and the allure of attractive dividend yields.
Investors’ participation picked up notably, with deal count surging nearly 37 per cent to 70,329 transactions and trading volume jumping 18.6 per cent to 2.19 billion units.
More importantly, the value of transactions leapt by 34.6 per cent to N75.41 billion, underscoring a shift toward higher-value positions as both institutional and retail players sought to lock in first-quarter gains and position for the next wave of earnings releases.
While the market’s breadth remained positive, 52 gainers versus 36 decliners, giving a breadth ratio of 1.44 times, the performance across sectors was mixed.
The consumer goods sector led the charge, powering the market’s advance with a 2.89 per cent uptick as names such as Fidson Healthcare, Cadbury Nigeria, and May & Baker Nigeria enjoyed strong rallies following robust revenue growth and margin expansion.
The industrial goods segment also managed to stay in positive territory, recording a 0.4 per cent gain on the back of healthy order books and solid cash yields at the likes of Caverton Offshore Support, UPDC REIT and Beta Glass.
In contrast, profit-taking weighed on the banking, oil and gas, insurance and commodities sectors. Banks gave back 0.38 per cent amid sell-offs in Access Corporation and Ecobank, even as most lenders reported strong results and interim dividends.
The oil and gas index slipped 2.9 per cent on softer regional crude prices and profit-taking in midstream stocks such as Aradel Holdings, which had posted an impressive turnaround in the previous quarter.
Insurance stocks fell 2.89 per cent, dragged down by mixed underwriting results and elevated claims ratios at Link Assurance, Guinea Insurance and Sunu Assurances, while the commodities index dipped 1.12 per cent amid concerns around input-cost inflation for packaging and bulk-commodity producers.
Dividend declarations have been a further catalyst for positive sentiment. Dangote Sugar Refinery announced a N3.50 interim dividend per share payable in June, Guaranty Trust Holding Company declared a N2.00 final dividend to be paid in July, and UPDC REIT confirmed a N0.1 per-unit distribution, yielding over eight per cent at current prices.
These healthy yields, coupled with strong Q1 profit growth, have rekindled investor interest in equities versus money-market instruments, reinforcing the bullish undertone.
Analysts at Codros Capital have projected a generally positive market outlook for the coming week, driven by ongoing earnings and dividend announcements. However, they caution that trading sentiment may vary, with some investors likely engaging in selective stock picking and profit-taking after the recent rally, given the absence of strong near-term catalysts.
Cowry Asset Management Research advises investors to focus on fundamentally sound stocks, emphasising the importance of due diligence in portfolio selection as they navigate potential market volatility.
This guidance comes as market participants closely watch critical macroeconomic data, including the April 2025 Consumer Price Index (CPI) from the National Bureau of Statistics (NBS), first-quarter GDP figures and the outcome of the Monetary Policy Committee (MPC) meeting scheduled for later in May.
GUARDIAN Newspapers.