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Capital market gains N4.2tn in one year

By on August 21, 2013

The equities section of the Nigerian Stock Exchange has been on a steady rise in the last one year, leading to a total appreciation of N4.6tn as of Monday’s closing.

The steady climb in the market, which began towards the end of October 2012, largely continued into the year 2013, with the market capitalisation of the listed equities rising to N11.654tn on Monday.

This represents a significant appreciation of 57 per cent or N4.2tn compared to the N7.417tn, recorded at the beginning of the year.

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.

Between July 2012 and Monday, the NSE All-Share Index rose by 58 per cent or 13,499.46 basis points to 36,800.68 basis points from 23,302.22 points recorded last year.

The NSE-30 Index, which measures the performance of the top 30 equities on the Exchange, also rose by about 60 per cent during the period under consideration.

This is a significant increase when compared to the performance of major markets in the global economy.

The Managing Director, Lambeth Trust and Investment Limited, Mr. David Adonri, said the performance of the Nigerian market was largely due to the sustained interest of foreign investors.

He said it was essential for the Federal Government to ensure that the interest was sustained as this would stabilise the market in 2013.

“As a result of the huge foreign portfolio investment inflow, the recovery of the equities market remained sustained in 2012 and into this year. However, this year, government should ensure that there is considerable decline in public debt finance so that more investment funds can flow into the real sector and the equities market,” Adonri said.

The General Manager, Client Services, Compass Investment and Securities Limited, Mr. Sam Ndata, said that the increase in activities within the last year was as a result of the efforts by the regulators to ensure that foreign investments continue to flow into the Exchange.

Ndata said, “The management of the Exchange is putting a lot of things in place to make sure that the market bounces back. You know all these foreign investors, the moment they get news, whether verified or unverified, they will want to take their money out, and the moment they do that, there may be a stampede and everybody will want to take their money out, believing that something is wrong even though nothing is wrong as far as the market is concerned.

“We believe foreign investments are increasing. If they are not increasing, they won’t have such an impact when they pull out their money.”

Speaking in the same vein, the Chief Executive Officer, Maxifund Investments and Securities Limited, Mr. Okechukwu Unegbu, said it was important for the regulators to increase efforts at attracting increased participation of local investors.

 

 

[Punch]