As the nation’s economy continues on steady recovery, investments at the equities market of the Nigerian Stock Exchange (NSE) appreciated by N3.43 trillion in 10 months, investigation by InsideBusiness Online has revealed.
The appreciation was buoyed with the introduction of the foreign exchange Investors & Exporters Foreign Exchange (I&EFX) windows by the Central Bank of Nigeria (CBN) which impacted on share price of blue chips companies lon the Exchange.
Also, investors gained N44 billion from their investments in stocks for the month of October thereby prompting market to describe the performance as impressive, given that the year commenced on the negative record of 2016.
While activities in first quarter ended negative with a loss of 5.05 per cent, investors’ confidence returned in second quarter to close with a gain of 29.79 per cent, while the third quarter recorded a return on equities of 7.01 per cent.
Trading activities from January to October revealed that the NSE All- Share Index gained 9,805.67 basis points or 36.49 per cent to close at 36,680.29 basis index points on October 31, 2017 as against 26,874.62 basis points at which it opened for the year. Market capitalisation of equities market appreciated by N3.4 trillion to close at N12.69 trillion compared to N9.25 trillion it closed in 2016.
Reviewing the year-to-date as at October 31, of sectoral indices showed that except for NSE Oil and Gas and NSE Alternative Securities Market (ASeM), all other indices closed positive.
NSE Banking lead with a gain of 69 per cent, NSE 30 followed with a gain of 40.19 per cent, NSE Consumer Goods appreciated by 28.92 per cent, while NSE Industrial Goods up by 27.16 per cent.
NSE Lotus II, and NSE Insurance rose by 25.07 per cent and 10.10 per cent respectively. On the other hand, NSE Oil and Gas declined by 8.80 per cent, while NSE-ASeM depreciated by 2.29 per cent.
Capital market analysts attributed the impressive performance to better-than-expected quarterly earnings, the establishment of the I&E FX Window was most significant for the equities market.
They added that the addressed concerns of foreign portfolio investors around the country’s currency outlook and the report of Pension Commission approved the implementation of the multi-fund structure, having the potential to significantly increase local pension funds’ exposure to equities by Pension Funds Administrators (PFAs) for RSA funds, contributed immensely to equities rally.
On the macro front, they noted that the signals of an improving macro economy with Nigeria’s exit from recession with its second quarter Gross Domestic Product (GDP) growth of 0.55 per cent after five consecutive quarters of being negative.
Speaking on the stock market performance, the managing director of HighCap Securities Funds Limited, Mr. David Adnori said, “The market has been stable since it recovered from the negative position to positive position from April and it is been on the positive terrain from that point till date.”
He explained that volatility in the market is not very severe in the 10 months under review.
According to him, “This indicate that stability is coming to the market and with the impressive nature of most of the third quarter results for example Nestle declaring an interim dividend of N15, this tells us the fundamentals of the market are getting stronger in such a manner that the forecast analysts have predicted, the All-Share Index can hit 40,000 points at the end of the year may still come to pass.”