Trading in equity extended gains on the Nigerian Stock Exchange Wednesday as the benchmark index closed higher, buoyed by improved optimism.
The All Share Index crossed the 30,000 points for the first time since October 2015.
The appreciation recorded in the share prices of Dangote Cement, Transcorp, Zenith Bank, Guinness and GT Bank were mainly responsible for the gain recorded in the index.
The total value of stocks traded was N7.93billion, up 16.81 per cent from N6.79billion recorded the preceding day.
The total volume of stocks traded was 541.86million in 5,727 deals, while the three most actively traded stocks were Guaranty Trust Bank, Access Bank and Zenith Bank.
Stock analysts noted that the current rally is mostly driven by domestic investors as foreign investors are still on the side-lines.
The index appreciated by 2.40 per cent to close at 30,127.82 points compared with an appreciation of 2.27% recorded the preceding day.
Before now, many investors have kept a close watch on crude oil prices. But that has been replaced by the new CBN’s foreign exchange policy as a major catalyst to drive short/mid-term growth in the market.
While the new foreign exchange policy appear to have strengthened overall market sentiment, it’s only a matter of time before speculation will begin as to how far the current rally will go given the weak economic and business fundamentals.
The last twenty trading days have been a dream run for the equity market with the benchmark reaching a new high.
While the current rally came as a relief, further growth in the benchmark index are being projected given the momentum in the market.
Investment analysts at DLM Securities noted that though it may be tempting to assume that the current momentum and market depth would carry the ASI to a new high, however, every momentum rally are usually followed by correction for a healthy equity market.
“Whether the current rally will extend up to the second quarter earnings season or even beyond remain uncertain in our view particularly given the current weak economic and business fundamentals.
“When it comes to stock-picking, stocks in the banking space continues to outperform, though, everything now points to half year 2016 earnings,” the firm said.