Nigeria’s stock market experienced an extraordinary surge on Tuesday, reaching its highest point since June 9, 2008. The benchmark index skyrocketed by an impressive 4 percent in response to the news of the arrest of Godwin Emefiele, the central bank governor, over the weekend. This unexpected development has bolstered optimism among investors, sparking hopes for a potential return of much-needed liquidity to the market.

 Surge in Transaction Volume Reflects Improved Risk Appetite

The market witnessed a remarkable surge in transaction volume, more than doubling compared to the previous session. This surge can be attributed to the significantly improved risk appetite that greeted Emefiele’s suspension. The central bank governor’s unorthodox policies in recent years had deterred many investors, and his arrest has had a profound impact on market reactions.

Positive Sentiments Ripple Through Nigerian Markets

Emefiele’s arrest has sent ripples of positive sentiment across the Nigerian markets. On Monday, Nigeria’s dollar bonds soared to their highest level this year, reflecting the overall optimism among investors. Analysts at United Capital, in their outlook note for the week, anticipate further buy-interests in anticipation of the H1-2023 earning season. However, profit-taking activities are expected as investors seek to secure their gains from profitable stocks.

Market Performance and Investor Sentiment Remain Positive

Market breadth, an indicator of investor sentiment towards trade, was overwhelmingly positive as 61 gainers were reported compared to 14 decliners. The all-share index experienced a significant growth of 2,232.6 basis points, closing at an impressive 58,163.6. The market capitalization also surged, reaching a staggering N31.7 trillion. Year to date, the index has recorded a remarkable return of 13.5 percent.

Top Gainers and Losers in the Nigerian Stock Market

Amidst the market surge, several stocks stood out as top gainers. NASCON led the pack, appreciating by 10 percent and closing at N17.05. Access Holdings also experienced significant growth of 10 percent, ending trade at N14.30. GTCO and Lasaco followed suit, both rising by 10 percent. Zenith Bank completed the top five gainers, climbing by 10 percent to N30.80.

On the other hand, some stocks faced declines. John Holt led the losers, declining by 10 percent to close at N1.26. Ellah Lakes shed 10 percent, ending trade at N3.60. The Initiates and Caverton also experienced depreciations, while Veritas Kapital closed with a 4.35 percent loss.

Active Stocks and Trading Volume

In terms of trading volume, UBA emerged as the most active stock, with 214.9 million shares worth N2.3 billion traded in 608 deals. GTCO followed closely with 208.1 million units of shares, valued at N6.2 billion, exchanged in 613 transactions. Zenith Bank recorded 85.7 million shares worth N309.2 million, traded in 743 deals. Japaul and Access Holdings also showcased significant trading activity, with millions of shares changing hands.

Nigeria’s stock market experienced a historic surge, propelled by the arrest of the central bank governor. This unexpected turn of events has generated immense optimism among investors, with hopes for the return of market liquidity. The positive sentiment rippled across various sectors, reflected in the transaction volume and market performance. While some stocks witnessed significant gains, others faced declines. The market remains active, with notable trading volume in several key stocks. Investors are advised to stay vigilant and explore opportunities in fundamentally sound stocks with attractive valuations.

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