The NGX Banking sector tracked by the NGSEBNK10 index, has shown a significant recovery trend over the last 14 weeks, having rebounded from a 24% decline recorded in April. There are signs that this sector may return to its March high of 1,029 points as it experiences positive price movements and increased trading volume.
Individual stocks are driving the sector’s recovery, with indicators that large-cap bank stocks are on their way back up, pushing positive price action as well. This can be observed through the trade volumes of FUGAZ stocks (First Bank, UBA, Zenith Bank, Access Bank, and GTBank). Trading between FUGAZ stocks has contributed greatly to the index’s monthly trade volumes. For instance, trading volumes for First Bank, UBA, and Zenith Bank alone reached 49 million shares on August 27th, making up 73% of the total weekly trade volume.
In August, the NGX Banking sector performed better than most other sectors, alongside the Oil & Gas and Insurance indices. The banking index followed closely after the Insurance and Oil & Gas indices, recording a positive performance, according to the market report for the week ended August 23rd, 2024.
During the same period, the Oil & Gas index gained 3.54%, while the Insurance index improved by 1.90% relative to the previous week’s closing price. The Banking sector index made modest gains of 0.37%.
In contrast, the Consumer Goods and Industrial Goods sectors finished the week with negative performance, with the latter falling by 4.94% compared to the previous week. The Consumer Goods index also recorded a decrease of 1.42%.
The NGX Banking index has reflected a similar trend as the all-share index, which had also dropped by up to 6% in April.
However, unlike the all-share index, the banking index has started recovering from the losses made in April, albeit at a slow pace.
