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NSE Index rises 1.37% as equities remain attractive

By on November 28, 2014

The Nigerian equities market maintained a positive trend yesterday with the Nigerian Stock Exchange (NSE) All-Share Index (ASI) appreciating by 1.37 per cent to close at 34,583.29, from 34,115.84 the previous day. Similarly, the market capitalisation added N153 billion to close at N11.417 trillion, up from N11.263 trillion recorded the previous day.
The positive trading at the stock market came as contradiction to expectations that the market would witness negative performance following the decision of the Monetary Policy Committee (MPC)of the Central Bank of Nigeria (CBN) to devalue the naira and hike savings deposit rate and cash reserve ratio(CRR) for private sector funds.
The hike in the  Monetary Policy Rate (MPR), which will to lead to increase in interest rates and fixed income securities,  is expected to attract some investments from equities market to fixed income securities.
Analysts at WSTC Financial Services Limited, an investment banking firm,  had said although the  equities market currently presents attractive entry points, they expect the re-allocation of assets into fixed  income securities in the short term to affect the performance of the equities market.
“ Also, we expect investors to price in the effect of  constrained revenue generating capacity (a fallout of the increase in the private deposit CRR) and higher cost of fund (particularly the 30 basis points increase in savings deposit rate as a result of the increase in the MPR) into banking stocks,” they had said.
However, most equities remain attractive to investors given their  current prices after suffering massive  declined  in recent weeks. Hence, more equities closed on the positive side yesterday leading to a gain of 1.37 per cent in the ASI compared to a growth of 0.71 per cent the previous day.
Thirty-three stocks added value compared with 18 that depreciated. PZ Cussons Nigeria Plc led  the gainers with 10.2 per cent per cent followed by Skye Bank Plc with 6.10 per cent. May & Baker Nigeria Plc, Mobil Oil Nigeria Plc and FCMB Plc  appreciated by  five per cent apiece.
Conversely,  Champion Breweries Plc led the price losers with 4.9 per cent, followed by Airline Services Plc with 4.8 per cent.

 

[ThisDay]