By Our Correspondent
The Nigerian equities market closed the month of October on a positive note, adding approximately N2 trillion to its market capitalisation as a strong rally in heavyweight stocks, particularly Dangote Cement, reversed losses recorded during the early part of the month.
The monthly recovery was largely driven by strong performances in selected industrial stocks and other highly capitalised companies. Dangote Cement emerged as a major contributor, recording a significant price appreciation in the final trading sessions and helping the benchmark index recover from its earlier losses.
Market capitalisation increased from about N163.1 trillion at the end of September to N165 trillion as of October 30, while the All-Share Index (ASI) gained 1.23 per cent during the month. The performance also pushed the market’s year-to-date return to 63.42 per cent.
According to the supplied market data, October recorded the Nigerian equities market’s sixth positive monthly performance in the past decade, extending its positive run to a second consecutive month.
The market, however, experienced a difficult start to the month. The All-Share Index declined by 0.97 per cent by the close of the first full trading week on October 9, with selling pressure continuing into the second and third weeks. The persistent losses raised concerns about another monthly decline, particularly as the market had experienced alternating positive and negative performances since May.
The trend changed significantly during the final trading week as renewed buying interest in large-cap stocks triggered a strong rebound. The index advanced from 244,956.94 points on October 22 to 254,299.49 points on October 30, representing a gain of 9,342.55 points, or 3.81 per cent, within six trading sessions.
Dangote Cement was at the centre of the recovery. Its share price climbed from N1,010 on October 22 to N1,420 on October 30, representing an appreciation of approximately 40.6 per cent over the period.
The stock also recorded a monthly gain of 33.12 per cent, closing at N1,420 per share compared with N1,066.70 at the end of September. The appreciation lifted the company’s market capitalisation to approximately N24 trillion, reinforcing its position as one of the biggest contributors to October’s market gains.
Buying interest reportedly intensified following developments surrounding Femi Otedola’s alleged acquisition of a significant stake in the cement manufacturer, although the supplied market figures do not independently establish the reported transaction.
Beyond Dangote Cement, several other equities recorded notable gains during the month. Honeywell Flour Mill appreciated by 25.28 per cent to close at N22.55, while Fidelity Bank advanced 10.85 per cent to N24. Guinness Nigeria gained 9.93 per cent to N423, and CAP rose by 10 per cent to N110.
Ecobank Transnational added 4.41 per cent to close at N71, while Unilever Nigeria appreciated by 3.91 per cent to N109. MTN Nigeria also recorded a modest increase of 1.55 per cent, ending the month at N850.
In the smaller-cap segment, Livestock Feeds emerged as one of the strongest performers, appreciating by 64.20 per cent to N13.30. E-Tranzact International gained 33.61 per cent to close at N16.30, while Multi-Trex Integrated Foods recorded a 100 per cent increase, doubling its share price from N0.36 to N0.72 to post the highest percentage gain in the supplied monthly data.
The positive performance of some major industrial stocks also coincided with improved corporate earnings. Dangote Cement reported a 41.5 per cent increase in its nine-month profit before tax to N1.47 trillion, providing a strong earnings backdrop to the appreciation in its share price.
Despite the market’s positive headline performance, however, the underlying market picture remained relatively weak. Banking, insurance and consumer goods indices recorded declines during the month, while the number of equities that lost value was significantly higher than those that appreciated.
Data covering 146 securities showed that 72 stocks declined, 28 advanced and 46 remained unchanged. This distribution indicates that October’s market recovery was largely concentrated in a relatively small number of stocks rather than driven by widespread buying across the equities market.
There were, however, signs of improving market participation towards the end of the month. During the final trading week, the number of advancing stocks increased to 33 from 20 in the preceding week, while declining equities dropped to 48 from 55. Meanwhile, 65 securities remained unchanged, compared with 71 in the previous week.
The improvement in weekly market breadth suggests that investor interest was gradually extending beyond a handful of heavyweight stocks. Nevertheless, the overall monthly distribution of gainers and losers indicates that significant weaknesses persisted across several segments of the market.
For investors, October’s performance highlights an important distinction between index growth and the broader health of the equities market. An increase in the All-Share Index and total market capitalisation does not necessarily mean that most listed companies are experiencing improved valuations.
Rather, the month’s performance demonstrates how concentrated demand for a few highly capitalised stocks can influence the direction of the entire market, even when a larger number of equities are recording losses.
Going forward, the sustainability of the Nigerian equities market’s positive momentum may depend on whether improved corporate earnings, renewed investor confidence and buying interest can spread across more sectors and listed companies. A broader recovery would provide a stronger foundation for the market than one largely dependent on the performance of a few heavyweight counters.
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