Despite the nation’s economy uncertainty, leading to foreign investors exiting the economy, the equities market segment of the Nigerian Stock Exchange (NSE) has gained N1.8 trillion in seven months of 2019, Westernpostnigeria can exclusively report.
According to Westernpostnigeria findings, the market capitalization closed July 31, 2019 at N13.508 trillion from N11.731 trillion it opened for trading this year, an increase of N1.8trillion over MTN Nigeria, Skyway Aviation Handling Company Limited (SAHCOL) and Airtel Africa plc listing on the Exchange in the period under review.
On the contrary, The NSE All-Share Index closed trading July 31, 2019 at 27,718.26 basis points, 11.8 per cent decline from 31,430.50 basis points the equities market opened for trading this year.
Our correspondent gathered that the NSE 30 Index depreciated by 19.6 per cent to 1,139.33 basis points from 1,417.15 basis points while NSE Banking Index in seven months dropped by 16.5 per cent to 333.14 basis points as at July 31, 2019 from 398.94 basis points the market opened this year.
Other key indices revealed that NSE Industrial Index thus decreased by 13.3 per cent to 1,073.70basis points from 1,237.88 basis points while NSE Oil/Gas Index down significantly by 25.3 per cent to 225.86 basis points from 302.23 basis points the equities market closed in 2018.
Meanwhile, transactions in the market for first Half (H1) of this year showed that the All-Share Index, which mirrors the performance of the market in terms of equity price movement closed lower at 29,966.87 basis points on June 28, 2019, compared to 31,430.50 basis points at the beginning of the year, thus representing 4.66 percent loss in H1.
Meanwhile, the market capitalization, which represents the total value of investors’ assets was up by N1.485 trillion to N13.206 trillion on June 28, 2019 from N11.721 trillion at the beginning of the year.
Performance across the major sectoral indices was negative except for NSE Premium Board index which rose by 9.17 per cent in H1. On the other hand, Consumer Goods Index declined the most by 16.89 per cent. Oil and Gas index followed with a decline of 16.21 per cent, while NSE Industrial Goods index depreciated by 12.12 per cent.
Also, NSE Lotus 11, NSE 30, Banking and Insurance indices depreciated by 12.03 per cent, 11.39 per cent, 8.04 per cent and 2.16 per cent, respectively.
Capital market analysts said that the market expects the announcement of the government’s ministerial portfolios, economic team and a blueprint from the fiscal authority to kick off implementation of the 2019 budget in August.
In May, President Muhammadu Buhari signed the 2019 appropriation bill into law and the President was inaugurated for a second term in office. The President inaugurated the board of the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) to formulate policies and strategies to boost revenue collection for efficient allocation to the various tiers of government.
The current administration has among major themes of its development agenda, diversification of the economy from crude oil. This has resulted in the encouragement given to non-oil exports, as part of the Central Bank of Nigeria (CBN) placed a ban on importers of 43 items from accessing its official foreign exchange window.
Analysts noted that “If we are going anywhere as a nation economically, this is the time the fiscal and monetary authorities should work together to actualise the much talked about double-digit growth potential of Nigeria’s economy.”
On the market outlook, the chief operating officer of InvestData Consulting Limited, Mr. Ambrose Omordion stated that as bargain hunters are likely to hit the market any moment from now, while discerning investors are taking advantage of low valuation to position ahead of March year-end numbers and second half interim dividend stocks.
He noted that investors may also take into consideration the expected economic reforms as the government announces its much-awaited new cabinet, just as plans by the CBN to reduce banks’ participation in government securities is expected to boost private-sector lending to drive economic activities and investment.
He advised that investors should go for equities with intrinsic value and allowing numbers to guide their decisions while repositioning in any stock, especially now that stock prices remain low in the midst of mixed company numbers, weak economic and market fundamentals.
The Executive Vice Chairman, Highcap Securities, Mr. David Adonri said, the build-up to 2019 general election had negative effect on the capital market, stressing that post-election activities of the current administration worsen the situation, coupled with weak economic indicators.
He noted that the listing of Airtel Africa, among others, further increase equities market liquidity which translates to growth in market capitalization.