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Nigerian equities rally to best 6-day gain since 1998

By on December 31, 2014

The Nigerian Equities market continued with its rally monday, recording the sixth consecutive gain with the benchmark index rising 0.68 per cent to close at  34,663.92, while market capitalisation stood at N11.479 trillion.

The performance is regarded as the best six-day  gain since 1998 and it is fuelled by the  bargain hunting activities of domestic investors. The market has appreciated by 20 per cent between December 18 and on Monday.

Market indicators had dipped to two-year low recently when foreign investors sold Nigerian stocks as the price of crude dropped into a bear market and on concern that measures the country’s central bank put in place to stem capital outflows would hinder their ability to sell holdings in Africa’s top oil producer.

“The lower stock prices are opportunities for domestic buyers,”  Abiola Rasaq, a research analyst at Lagos-based Associated Discount House Limited, told Bloomberg News.
“The bargain hunting is done largely by the local investors who see opportunities to buy into these stocks. Foreign investors are being very careful because they are not clear about what regulations may come up,” he said.

Speaking in the same vein, Head of Africa Strategy at Standard Chartered Plc in London, Samir Gadio, said “The collapse in the stock market in the fourth quarter had resulted in much cheaper valuations, so it is likely that selected market players took advantage. t remains to be seen if these gains can be sustained given the lower oil price and risk aversion towards Nigeria’s tradable assets at the moment.”

At the close trading, 37 stocks appreciated compared to 25 that depreciated. Seplat Petroleum Development Company Plc led the price gainers with 10.2 per cent to close at N355.12 per share. There have been renewed interest in  Seplat since the recent disclosure pointing to a  possible merger with Afren Plc – a bigger Nigerian oil and gas peer quoted on London Stock Exchange (LSE).Caverton Offshore Support Group Plc and Vono Products Plc grew by 10 apiece to close at N3.30 and N3.00 respectively.

Conversely,  Conoil Plc led the price losers with 9.7 per cent, trailed by Livestock Feeds Plc and MRS Oil Nigeria Plc with five per cent each.

 

[ThisDay]