Don't Miss


Home   >   Nigerian Stock Exchange   >   Oil & gas, banking lead capital market recovery

Oil & gas, banking lead capital market recovery

By on June 16, 2014

The Nigerian Stock Exchange’s Oil and Gas Index and Banking Index have led the recovery of the market following a turbulent first quarter in which the Exchange witnessed its biggest sell-off in recent years.

A review of the NSE’s sectoral indices showed that the oil and gas sector, buoyed by the performance of Forte Oil Plc, Conoil Plc and the listing of Seplat Petroleum Development Company, rose by 49.9 per cent between March 31 and June 4, 2014.

The percentage increase witnessed by the index was more than twice the 17.71 per cent increase recorded by the banking index so far in the second quarter.

The performance has also seen both sectors erase the 15 per cent and 16 per cent decline they recorded, respectively in the first quarter to lead the recovery of the equities market.

Analysts had predicted that the market would stabilise in the second quarter due to the release of the first quarter results by companies as well as improvements in the global economy. And findings by our correspondent showed that the performance of the market indicators had been largely positive and broad.

For example, of the eight sectoral indices reviewed in June, only the NSE Alternative Securities Market Index had fallen below its value as of March 31. It declined by 0.15 per cent.

The NSE Insurance Index rose by 5.29 per cent in the period reviewed, erasing part of the 11.28 per cent decline it posted in the first quarter, while the NSE Consumer Goods Index wiped out 8.66 per cent of the 12.11 per cent fall it recorded in Q1.

The NSE Lotus Islamic Index and NSE Industrial Index had as of June 4 gained 0.97 per cent and 4.65 per cent in the second quarter as against a loss of 3.59 per cent and 1.59 per cent, respectively in Q1, while the NSE 30 Index rose by 9.88 per cent.

The Chief Executive Officer, Enterprise Stockbrokers Plc, Mr. Rotimi Fakayejo, explained that the surge by the oil and gas index was as a result of the performance of Forte Oil and Oando, which were the most capitalised stocks on the index. He added that the listing of Seplat was also a factor.

He said, “For the oil and gas sector, at the close of the first quarter, the price of Forte Oil was N96.60. Since that time up until now, it has gained 166.3 per cent. Oando was at N16.30 on March 31, but it was N20.34 last week Wednesday, signifying an increase of 24 per cent. These are the two most capitalised stocks on the oil and gas index; so, you can find justification for the increase from there.”

He explained that while Seplat did not have many shares in issue, its listing and performance were also a factor.

He said, “Seplat listed (in April) at N572 per share but now it is trading at N675 per share. Although the number of shares in issue is not much, it had a significant impact on the sector.”

The Chief Executive Officer, NSE, Mr. Oscar Onyema, had said the listing of the company had boosted the market capitalisation of the listed equities by $1.9bn.

Fakayejo also said renewed interest by foreign investors contributed to the recovery of the market.

 

 

[Punch]