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NSE equities value rose by N1.582tn in Q2

By on July 12, 2014

The market capitalisation of the listed equities on the Nigerian Stock Exchange rose by 12.71 per cent or N1.582tn in the second quarter of 2014, erasing losses made in the first quarter.

The market capitalisation, which stood at N12.44tn on March 31, climbed to N14.028tn at the end of the second quarter on June 30, 2014.

Developments such as the quantitative easing tapering by the United States and the suspension of Mr. Lamido Sanusi as the Central Bank of Nigeria governor had rocked the equities, resulting in a N780bn or 5.9 per cent loss in value in the first quarter.

However, the release of the first quarter results by the companies, the listing of Seplat Petroleum Development Company and Caverton Offshore Support Group on the NSE as well as improvements in the global economy led to a rally by the equities in the second quarter.

The NSE All Share Index, which measures the general performance of the major stocks quoted on the Exchange, also had a positive second quarter, advancing by 3,734.47 basis points or 9.64 per cent to close at 42,482.48 basis points at the end of the quarter; up from the 38,748.01 basis points at which it stood at the end of the first three months of the year.

Its year-to-date return, which was negative at -6.25 per cent on March 31, stood at +2.79 at the end of the second quarter.

The performance of the stock market was broadly positive as in addition to the major indicators, the NSE 30 Index, the NSE Lotus Islamic Index and the five sectoral indices all appreciated in the second quarter. Only the NSE Alternative Securities Market Index declined, albeit marginally by 0.1 per cent in the quarter.

For instance, the NSE 30 Index, a major stock market index that tracks the performance of 30 most liquid stocks, rose by 11.41 per cent or 197.86 basis points to close the second quarter at 1,931.77 basis points, up from 1,733.91 basis points at the end of March.

This was in contrast to the nine per cent decline it witnessed in the second quarter.

The Director-General, Securities and Exchange Commission, Ms. Arunma Oteh, had said recently at the Capital Market Committee quarterly meeting in Lagos that major stakeholders were satisfied with the performance of the market in the second quarter.

“The second quarter has been particularly interesting in many ways,” she said.

Commenting on the performance of the market in the second quarter, the Chief Executive Officer, Enterprise Stockbrokers Plc, Mr. Rotimi Fakayejo, said considering that the year-to-date return of the NSE All Share Index was below three per cent, not much had really changed.

He, however, said relative to the first quarter, the second quarter was positive.

Fakayejo said the performance of the NSE Oil and Gas Index, which by 62.46 per cent, far more than any other indices, and the recovery of several equities were among the factors that boosted the market in second quarter.

“For the first time also, we saw the market capitalisation rising above N14tn; it has never got to that level. So, that was a great milestone,” he added.

Regardless, Fakayejo said the performance of the market in 2014 would not match the level in 2012 and 2013 during which it rose by 37 per cent and 47 per cent, respectively.

“I think the year-end performance will still be up to about seven per cent. I believe we are going to see more positive performances from the companies and the second quarter results will play a role in determining where the market is heading,” he added.

Analysts at Meristem Securities Limited had observed last week that “poor first half performances, profit-taking on some counters with significant gains and fears around the upcoming 2015 general elections remain possible drags to the current positive trend in the market.”

 

 

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One Comment

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