Investors In Nigerian Equities Market Make Gains

 By Mike Abba

Investors in the Nigerian equities market are happy, as the stock market closed on a positive territory in the month of November, recording a N519 billion gain.

This is coming in spite of the volatility that has attended the market in recent times and uncertainties that still exist in some sectors where the impact of the exited economic recession has not fully disappeared.

A total of 41 stocks added value during the month under review as the average price movement depicted in the All-Share Index rose from 36,680.29 basis points (bsp) to 37,944.60 bsp – representing a rise of 1,264.31 bsp or 3.45 per cent.

In the same vein, market capitalisation gained 519 billion to close at N13.215 trillion from N12.695 trillion at the end of October.

Measured on Year to Date (Y-t-D) basis, the  equities market showed a superior performance above its peers in other African economies, suggesting that investors are enjoying comfortable returns on their investment in Africa’s largest economy.

On a Y-t-D basis, the index climbed by 11,069.98 bsp  or 41.19 per cent in the first  11 months  of the year (that is January – November, both months inclusive) while capitalisation rose by N3.885 trillion.

Data by NSE showed that Month-to-Date (M-t-D), Nigeria’s equities market recorded appreciation in 41 stocks and decline in 31 stocks as at November 30, 2017. During the period, 99 stocks did not record price movement, as their figures remained unchanged.

Further study showed that out of the 41 gainers recorded during the month, 32 companies surpassed the market’s average return of 3.45 per cent.

A new generation bank, Fidelity Bank Plc, in the financial services sector, was the biggest gainer for the period;  its share price appreciated by 35.53 per cent, while NAHCO followed with a gain of 32.31 per cent, followed by  Diamond Bank which appreciated by 24.75 per cent.

Others are Cadbury which share appreciated by 23.24 per cent and International Breweries that recorded  22.47 per cent in the appreciation of its shares.

On the flip 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 in the Consumer Product  sector recorded a decline of 11.80 per cent, and Champion Breweries lost 10.98 per cent – all  per share.

The improvement in the equities market performance is attributed to a number of factors which include the rise in global oil prices which has improved Nigeria’s  foreign reserved, now at $34.8 billion.

The improvement and stability recorded in the foreign exchange market is a pointer to the expected appreciation in market fundamentals in the stock market.

The recent report on capital importation published  by the National Bureau of Statistics (NBS) and the Central Bank of Nigeria (CBN) for the third quarter  (Q3) of 2017, 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.

The NSE had said that the positive performance reflects foreign investors’ rising confidence in the economy after experiencing the worst recession in 25 years.

Sectoral reviewing of the equities market performance showed that all the sectors closed positive, except for the NSE Consumer Goods and NSE ASeM that which closed on the negative territory.

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.

The sectors out-performed 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.

On the other hand, 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 in the positive territory during the month  include,  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.