Equities Market Capitalisation Hits N15trn

Equities Market Capitalisation Hits N15trn

The All-Share Index gained 10.2 per cent week-on-week to settle at 42,898.90 points while year-to-date return expanded to 12.17 per cent, with investors gaining a total of N1.5 trillion in value, as market capitalisation closed at N15.368 trillion.

The federal government’s effort at reviving and sustaining Nigeria’s economic growth has received commendations from investors, analysts and economic experts even as the market recorded highest weekly gain in 20 months.

The stakeholders, who said the nation’s economy has benefited from good work of the current Economic Management Team headed by Vice- President Yemi Osinbajo said the federal government has been deploying a mixture of fiscal and monetary policies to put the economy on the path of sustained growth.

The Nigerian stock market has continued to react to the positive market fundamentals and improving macroeconomic outlook since the beginning of the year 2018.

Last week, the NSE ASI recorded a distinction of 10.21 per cent week-on-week (WoW) and has a year-to-date gain of 12.17 per cent. The Nigerian stock market in 2017 recorded a growth of 42.30 per cent.

Also, in the World Bank’s latest rankings on Ease of Doing Business in Nigeria released in October 2017, the country moved up 24 places to 145 in ease of doing business.

The performance has been attributed to improved flexibility with regards to administrative structure of the FX market, particularly the introduction of the Investors’ & Exporters’ Window, which marked a turning point in FX market stability and investors’ perception of the Nigerian market.

Resilient corporate earnings further bolstered sentiment, recovery in the oil market and improved domestic oil production, which moderated the risk profile of the Nigerian economy.

The Cordros report on the weekly economic and marker report said, “According to the World Bank January 2018 report on Global Economic Prospects, Nigeria is forecasted to grow by 2.5 per cent in 2018, supported by improved commodity prices, investments, trade, and expectation that oil reserves will continue to recover and reforms will lift non-oil sector growth.

“It is safe to expect improved growth from both oil, supported by increased domestic production and price; and non-oil sectors bolstered by sustained FX stability, likely reforms, and strengthening consumer and business confidence”.

The managing director of HighCap Securities Limited, Mr. David Adnori said, the economy is improving and since the stocks market all over the world is the barometer of the economy, the improvements have been seen in the market activities.

He also noted that the international confidence in Nigeria is the outcome of the positive World Bank report on Ease of Doing Business in Nigeria, saying Nigeria has been rated as one of the improved economies in the world.

He noted that the Economic Recovery and Growth Plan (ERGP) and other reforms, including Nigeria Industrial Revolution Plan (NIRP), which deployed innovative approaches has improved the economy.

The managing director of APT Securities and Funds Limited, Mallam Kurifi Garuba added that Nigeria’s capital market remains a sweet and attractive spot for both foreign and local investors.

He added that although performance in the past year had been hampered by FX challenges, the improvements that have been witnessed since the introduction of better FX management policies suggest that the market still has potential to attain new heights.

On his part, the chief operating officer of InvestData Consulting Limited, Mr. Ambrose Omordion, said that since May 2015, government has embarked on intensive policy reforms and initiatives to align the industrial sector with stakeholders driven implementation process, specific deliverables, measurable outcomes and key performance indicators.

Also, the president of the Lagos Chamber of Commerce and Industry (LCCI), Dr. Nike Akande at a forum recently said the World Bank’s Ease of Doing Business report on Nigeria was delightful news for the OPS and the government.

She said that the report has shown that the short to medium term outlook for the Nigerian economy was much better than what it was this time last year.

The LCCI president traced the country’s economic improvement to the outcome of the series of new policy initiatives, engagements and consultations with key stakeholders and some positive developments in the external sector. “We appreciate the setting up of the PEBEC under the chairmanship of the vice president.

We applaud the recent executive orders taken by the administration to enhance the country’s investment climate and improve the ease of doing business in Nigeria”, she said.

Akande noted that the reforms of the current administration, especially the Executive Orders on Ease of Doing Business in the country were good for economic recovery.

Nigerian Stock Exchange (NSE)-All-Share Index (ASI) recorded a distinction of 10.21 per cent week-on-week in the second week of the year, following continued buying spree across sectors.

In line with the bullish performance, sector performance was broadly positive as all indices advanced week-on-week.

The Industrial Goods Index led the gainers chart, up 12.98 per cent, consequent on price appreciation in Wapco and Dangote Cement.

The Banking and Oil and Gas indices followed, adding 12.9 per cent and 7.5 per cent, as Guaranty Trust Bank, Zenith Bank, Conoil and Seplat recorded sustained buying interest. Similarly, the Insurance and Consumer Goods indices closed 6.5 per cent and 5.6 per cent northwards on the back of a rally in Linkage Assurance, Mansard Insurance, Nigerian Breweries and Guinness.

Investor sentiment as measured by market breadth significantly improved as 66 equities appreciated in price during the week, higher than 55 of the previous week. 

Seven equities depreciated in price, lower than 12 equities of the previous week, while 99 equities remained unchanged lower than 105 equities recorded in the preceding week.

The top performers for last week were Honeywell Flour with a gain of 39.7 per cent, Skye Bank with 37.7 per cent and Champion Breweries with 36.6 per cent. On the other side, DN Meyer led the losers’ chat by 12.9 per cent, Glaxosmith declined by 2.7 per cent and Dangote Sugar shed 2.65 per cent.

In the same vein, activity level strengthened as average volume and value traded rose 66.2 per cent and 193.3 per cent to 5.021 billion shares worth N68.974 billion in 41,542 deals in contrast to a total of 2.417 billion shares valued at N18.813 billion that exchanged hands previous week in 20,874 deals.

The Financial Services Industry, measured by volume, led the activity chart with 3.417 billion shares valued at N31.649 billion. The Conglomerates Industry followed with 894.357 million shares worth N2.180 billion, while Consumer Goods Industry traded a turnover of 380.493 million shares worth N26.243 billion.

This week, capital market analysts anticipated bargain-hunting activity to continue on positive investors’ sentiments. 

Analysts at APT Securities and Funds Limited also said, “We expect the positive mood to continue in this trading week as there is still more room for an upturn, though we might see a minimal drop to accommodate speculators on profit taking”.

Cordros Capital Limited also stated: “Following last week’s strong rally, the possibility of profit taking is high this week. We reiterate that still-positive market fundamentals and improving macroeconomic conditions suggest legroom for further gains”. 

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