Insurance Act, earnings results spur stock market to 3.2% gain
yarkarkara
By Peter Egwuatu
The newly enacted Insurance Industry Act, improved corporate earnings for the second quarter of the year, Q2’25, and some macro economics development have greatly impacted the stock market, as the major index of the market rose Week on Week, WoW, by 3.2%.
Specifically, the Nigerian Exchange Limited, NGX, All Share Index, ASI, closed higher, last week, at 145,754.91 points from 141,203.05 points the previous week, thus sustaining the bullish momentum for the eleventh consecutive week.
In the same vein, market capitalisation, which represents the total value of equities listed on the Exchange, gained over N2.214 trillion WoW to close last week at N92.214 trillion from N89.372 trillion the previous week.
Market operators have emphasised that the positive performance of the market was underpinned by sustained bargain hunting, a strong positive reaction to the enactment of the Insurance Industry Reform Act, Q2 earnings result and some macro economics development.
Analysis of the market shows that gains in BUA Foods by 18.9%, Dangote Cement 9.2%, BUA Cement 13.9%, AIICO Insurance 59.8%, Cornerstone Insurance 54.5% and NEM Insurance 29.9% culminated to lift the NGX ASI higher. As a result, the Month to Date, MtD and Year to Date to YtD returns settled higher at +4.2% and +41.6%, respectively.
Market activity was mixed, as trading volume increased by 80.2% WoW while trading value declined by 10.1% WoW.
On sectors, performance was broadly positive, as the Insurance Index up by 41.0%, Industrial Goods Index 8.7%, Consumer Goods Index 8.3% and Oil & Gas Index 0.2%, while the Banking Index declined by -0.8% being the sole loser of the week.
Commenting on market outlook, analysts at Cordros Research stated: “In the week ahead, we expect choppy trading, as investors book profits on recent gainers, though bargain hunting in select counters is likely to persist. Over the medium term, we expect the sustained moderation in fixed income yields to support continued rotation into equities.”
Commenting on market performance and outlook, analysts at InvestData Consulting Limited, said: “ There were also the twin impact of increasing investor confidence and positive sentiment around corporate earnings, together with the new insurance reform Act, which boosted market performance.However, traders and investors are advised to approach the market with discipline, keeping an eye on sector-specific earnings and macroeconomic developments that could influence market direction”.
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