The stock index of the Nigerian Stock Exchange climbed to a seven and a half month high on Thursday, lifted by gains in the banking sector and an increase in foreign capital inflows.
The index has edged up 5.98 percent so far this year, recouping some of the losses it sustained earlier in the year caused by banks publishing negative or smaller profits for full year owing to bad loan write-offs.
The stock index crossed the psychologically significant level of 21,000 points for the first time this year, gaining 0.64 percent on Thursday to close at 22,109.76 points.
“We’re still sticking to our year-end target of 23,500 for the index, with banks to lead the way,” said Bunmi Asaolu, head of research at FBN Capital, a subsidiary of First Bank.
Banks were back in the black in the first quarter of this year, after posting disappointing earnings in 2011, drawing investors back to equities and boosting stock market liquidity.
“The Q1 results (are) … the most visible sign that things have improved and that we are past the end of the last bad loan cycle,” Asaolu said.
The index of the top ten banks has climbed 15 percent this year to emerge as the second-best performing index so far, after the consumer goods sector, helping lift the broader index.
United Bank for Africa (UBA) gained 4.94 percent on Thursday, almost the maximum five percent daily limit allowed, to N3.40, as the best gainer.
Other gainers included FCMB and Sterling Bank, up more than 4 percent each.