Equities’ market jumps N942bn in 5months



With the seeming stability in the nation’s economy, the equities market segment of the Nigerian Stock Exchange (NSE) has grown by N942 billion in the first five months of 2017.

Computation by InsideBusiness shows that market capitalization of all listed equities on the NSE appreciated by 10.2 per cent or N942 billion from N9.256 trillion that it opened in January 2017 to close at N10.198 trillion, yesterday.

Consequently, the NSE All-Share Index which is the barometer of the market movement rose by 9.8 per cent to 29,498.31 basis points from 26,874.62 the equities market opened this year for trading.

The equities market fundamentals remain strong owing to the improved stability and rapid foreign exchange intervention by Central Bank of Nigeria (CBN) that has continued to boost liquidity.

In addition was the stability in the macro environment, following the Monetary Policy Committee of the CBN, retention of the interest rate at 14 per cent for the third successive period in 2017.

The NSE Banking and Industrial Goods Indices recorded significant increase following improved first quarter of 2017 corporate earnings and Foreign Portfolio Investment (FPI) keen interest on their shares.

In the period reviewed, there was noticeable upswing in the shares of Zenith Bank, Guaranty Trust Bank, United Bank For Africa Plc and Access Bank Plc, among others forcing the NSE Banking Index to grow by 30.7 per cent to 358.54 basis points from 274.32 basis points it opened in 2017.

Dangote Cement share price appreciation was major driver in the NSE industrial index in five months as the index rose by 9.1 per cent to 1,741.28 basis points year-till-date from 1,595.33 basis points.

The share price of Dangote Cement in five months has gained N17.2 billion from N173.99 (N2.96 trillion ) to N175 (N2.98 trillion) on Wednesday.

Other Indices that recorded increase include, NSE 30 Index that rose by 12.9 per cent to 1,348.89 basis points as against 1,195.2 basis points while the NSE Consumer Goods Index recorded a marginal increase of three per cent to 733.84 basis points from 712.65 basis points as at December 31, 2016.

The Managing Director, Highcap Securities Limited, Mr. David Adnori, attributed the outcome to impressive first quarter corporate earnings, stressing that the CBN’s introduced windows also impacted on the equities market in five months.

According to him, “The impressive first quarter results of listed companies lay the fountain for steady growth in the capital market indicators.

“Other factors that propel the rally include the CBN’s introduced foreign exchange window for Investors and Exporters.

“Thirdly, the takeover by acting president has boosted investors’ confidence in the economy that has impacted positively on the capital market; lastly, the nation’s economy moving out of stag inflation has also contributed to the capital market growth in five months.”

He maintained that if the economy continued to show positive signs, the recovery of the capital market is going to be steadily moving forward.