Following two months of sustained losses on the domestic bourse, the equity market rose 6.4% m/m in May to 55,769.28 points. In part, the performance of the market was buoyed by a late rally towards the end of the month due to the opportunities presented by previous price corrections, and market reacting positively to critical reforms promised during the inaugural speech by President Bola Tinubu on May 29th. Consequently, YTD return of the market rose to 8.8% against 2.2% the prior month while market capitalisation advanced ₦1.8tn to ₦30.3tn. Trading activity for the month was mixed as average volume traded fell 44.4% m/m to 592.7m while average value traded rose 43.8% m/m to ₦7.5bn. The top traded stocks by volume for the month were ACCESSCORP (1.1bn units), UBA (1.1bn units), and FIDELITY (0.5bn units), in contrast SEPLAT (₦29.4bn), GTCO (₦13.6bn), and ACCESSCORP (₦12.1bn) led the value chart for the month.
Across our coverage sectors, performance was bullish in the month as all indices closed in the green. Leading the gainers, the Banking and Oil & Gas indices rose 19.5% and 15.2% m/m respectively on the back of buying interest in ZENITH (+27.2%), FBNH (+32.7%), SEPLAT (+7.6%), and TOTAL (+25.1%). Trailing, gains in BUAFOODS (+13.9%), NESTLE (+19.8%), MANSARD (+37.1%), and AIICO (+13.0%) drove the Consumer Goods and Insurance indices higher by 15.2% and 13.4% m/m, respectively. Similarly, the AFR-ICT and Industrial Goods indices rose 1.9% and 1.7% m/m respectively due to price appreciation in MTNN (+9.8%), DANGCEM (+7.4%), and WAPCO (+7.9%).
Investor sentiment, as measured by market breadth, improved to 1.60x from 0.05x recorded last month as 89 stocks gained, 14 lost while 47 were unchanged. The top performing stocks for the month were FTNCOCOA (+170.0%), CHAMS (+75.0%), and IKEJAHOTEL (+62.6%) while CHIPLC (- 24.6%), CHELLARAM (-18.8%), and ROYALEX (-17.9%) were the top underperforming stocks. This month, we expect the market to gain slightly as investors continue to assess the policy direction of the new administration.