Equities Market appreciates 41.2% in 11 months

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The equities market segment of the Nigerian Stock Exchange (NSE) appreciated by 41.2 per cent in 11 months despite the volatility from some blue chip companies over investors’ uncertainty.

In a Year to date performance, the equities market has outperformed its leading peers in Africa and by implication; meaning investors are earning good returns on their investment.

On a Year-To-Date (YTD) basis, the index up by 11,069.98 basis points or 41.2 per cent between January and November 2017, while capitalisation grew by N3.89 trillion.

The market capitalisation thus appreciated by N519 billion in November as some blue chips stocks added values for the month.

NSE All-Share index in November rose by 1,264.31 basis points or 3.45 per cent, from 36,680.29 basis points to 37,944.60 basis points, while the market capitalisation gained N520 billion to close at N13.22 trillion from N12.69 trillion it end October.

Month-to-date analysis of the stock market for 11th month ended November 30, 2017 indicated that only 41 stocks appreciated, 31 stocks declined, while 99 stocks remained unchanged.

In the reviewing month, out of the 41 gainers recorded during the month, 32 companies surpassed the market’s average return of 3.45 per cent.

Fidelity Bank was the biggest gainer for the period, as its share price improved by 35.53 per cent, Nahco followed with a gain of 32.31 per cent, while Diamond Bank appreciated by 24.75 per cent.

Cadbury share appreciated by 23.24 per cent and International Breweries share rose by 22.47 per cent. On the other side the biggest laggard during the month was Linkage Assurance, which lost 27.91 per cent of the month’s opening price, C & I Leasing shed 24.72 per cent, while Airline Services share lost 20.45 per cent.

Nigerian Breweries declined by 11.80, while Champion Breweries dropped 10.98 per cent, per share.

The general rise in the NSE composite index for the month may not be unconnected with the plethora of positive economic and market data, particularly the robust improvements in performance of listed companies for the period. There were also the growth in Nigeria’s GDP from 0.71, reviewed for the second quarter, to 1.4 per cent as released by the National Bureau of Statistics (NBS), the Purchasing Managers’ Index (PMI), just as the price of oil, Nigeria’s mainstay, at the international market continued to rise, amidst the country’s stable production output helped by the sustained peace in the volatile Niger-Delta region.

However, the recent released capital importation into the country by foreign investors put together by the National Bureau of Statistics (NBS) and the Central Bank of Nigeria (CBN) for third quarter, showed that Foreign portfolio investment on the Nigerian Stock Exchange in nine months ended September 30, 2017 stood at N783.34 billion (about $2.56 billion). The figure outperformed the N517.55 billion invested in the Nigerian capital market in full year 2016 by 51.36 percent.

According to the NSE, the performance is a proof that foreign investors, who decided to beat a retreat from the biggest economy in Africa during the time of recession, are beginning to have confidence again in doing business in Nigeria. Both foreign and domestic investments recorded a drastic drop on the Nigerian bourse in 2016.

Reviewing the Sectoral indices performance for the month closed positive, except for the NSE Consumer Goods and NSE ASeM that closed on the down side. The NSE Premium and Lotus indices drove the market the most in the month under review, with the former gaining 7.73 per cent, as a result of price appreciation of Dangote Cement and FBN Holdings, while the later followed with six per cent.

They thereby outperformed the composite NSE All-Share Index during the period, ahead of the NSE Industrial index which appreciated by 4.66 per cent up to reflect the improving performance of the companies in that sector, while the NSE Pension and NSE 30 indices grew 2.96 per cent and 2.36 per cent respectively, revealing investors’ interest in blue-chip and dividend-paying stocks, amidst the oscillating sentiments and attractive low price-to-earnings ratio attraction.

Other sectors that closed up during the month were,  NSE Banking, NSE Insurance, NSE Main Board and NSE Oil/Gas. On the other side, NSE Consumer Goods shed 0.82 per cent and NSE ASeM declined by 0.05 per cent respectively.

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