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Capital market recovers 94.3% of 2008 losses

By on May 23, 2013

If the figures obtained at the close of Wednesday’s equity trading is anything to go by, then the capital market is well on the way to hitting the pre-meltdown peak of 2008.

Investigations by our correspondent showed that the market had recovered about 94.3 per cent of the losses incurred at the beginning of the downturn in March 2008.

Specifically, the market capitalisation of the listed equities rose to N11.910tn on Wednesday, or 94.3 per cent appreciation of the N12.62tn peak recorded in March 2008.

The market capitalisation represents the aggregate value of all the companies or stocks quoted on the Exchange. It is obtained by multiplying the aggregate number of shares outstanding by the current price of each stock.

The current rebound in the equities market started sometime in 2012 as foreign and institutional investors started to regain confidence in the market and began to take positions, resulting in a growth of 34.5 per cent in December of that year.

Also, the Nigerian Stock Exchange All-Share Index closed higher at 37,259.91 points on Wednesday, representing 74 per cent compared to 21,388.88 a year ago.

On a year-to-date basis, the market has recorded a growth of about 33 per cent, as the market capitalisation, which opened 2013 at N8.974tn, has gained N2.94tn.

Also, the NSE All-Share Index has also gained 9,181.10 basis points or 32.7 per cent from 28,078.81 points at the beginning of the year, to 37,259.91.63 points on Wednesday’s close.

A recent data compiled by Bloomberg showed that the Nigerian and Kenyan markets were among the top 10 best performers in the world.

The Director-General, Securities and Exchange Commission, Ms. Arunma Oteh, said the capital market had recorded remarkable performance this year as a result of the various reforms and initiatives introduced by the regulators

According to her, this is evident in the fact that there has been increased participation by local and retail investors as against what obtained in the past when activities were dominated by foreign players.

She said, “We are excited about the market and the future prospects of our market, because people have come to recognise the importance of the capital market to transforming the economy, and that is what happens after one has had a bad experience like we did in Nigeria a few years ago.

“The good news is that we are on course to having the strongest and best performing capital market in the world. And the gains recorded in our market are not driven by euphoria but by fundamentals, which will get even stronger going by the feedback we have been getting. We are also excited that domestic investors are showing good signs of return to our market.”

The Chairman, Association of Stockbroking Houses of Nigeria, Mr. Emeka Madubuike, said stockbrokers had been involved in various efforts aimed at increasing the participation of local investors in the market.

He said, “Since stockbrokers are the front runners of the market and the major interface between the investors and the market, we, as an association, have decided to come together to seek ways to increase investor-confidence in the market. We will be involved in various investor education schemes to allow investors to become more aware of the happenings in the market.

“We have done a lot in this regard already and we know that a lot of work still needs to be done as we want to refocus to ensure that retail investors return to the market. Already, we have seen some improvements in this regard and we hope to see more as the months progress.”

The Chief Executive Officer, NSE, Mr. Oscar Onyema, said there had been better participation in the market by both local and foreign investors, adding that this had translated into increased transactions on the Exchange.