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NSE: Shareholders lost N152bn in April

By on May 6, 2016

The market capitalisation of the Nigerian Stock Exchange depreciated by N152bn in the month of April. This means that the value of shares held by investors in the various companies quoted on the Exchange declined by that amount.

The market capitalisation, which was N8.773tn as of April 1, 2016, fell to N8.621tn on the last trading day in the month (April 29).

The Exchange’s All-Share Index also fell to 25,062.41 basis points from 25,507.09 basis points in the period.

Despite the loss, the Nigerian equities market had last week consolidated on the penultimate week’s gains, advancing by 0.85 per cent week-on-week on three of the five trading days. Consequently, the index’s year-to-date return pegged at -12.5 per cent.

Last week, there were 34 gainers and 35 losers, while the volume and value of transactions advanced by 36.63 per cent and 22.05 per cent, respectively.

The development seemed to have defied market expectations given the recent threat of the exclusion of the NSE from the Morgan Stanley Capital International frontier markets index.

The market capitalisation dropped by N234bn in one day to N8.478tn from N8.712tn on the first trading day after the threat was made.

“We anticipate that the gains recorded over the prior weeks may incentivise profit-taking activities going forward, while investors’ perception about earnings releases is expected to further shape investment decisions,” analysts at Vetiva Management Company stated.

Speaking on the state of the market, the Chief Executive of the NSE, Oscar Onyema, recently said that the first quarter was a wild ride for most economies and markets as asset prices collapsed in the period.

He explained, “The second quarter beckons to be no less volatile, as oil prices have begun a retreat, geo-political tensions remain, and central bankers find themselves still walking a fine wire.

“In Nigeria, we all know too well the intricacies facing the economy and markets. With increases at a pace not familiar to recent memory, inflation is back in the double digits. Rigidity in the foreign exchange markets continues to be a challenge. Yet, Nigeria remains top of mind on the African continent for investors.

“Capital markets are critical to sustainability of growth and development in an economy. It is my strong belief that one of the things that Nigeria (and Africa) needs to sustain its growth is a solid and vibrant capital market ecosystem that will attract investment and unlock the potential that exists in the economy. Capital markets increase the proportion of long-term savings that is channelled to long-term investments.

 

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