Chinenye Anuforo; Chinwendu Obienyi
Equities trading on the Lagos floor of the Nigerian Stock Exchange (NSE) last month closed on a positive note with investors’ net worth bsoaring by 15.95 per cent due to increased activities ahead of 2018 earnings season.
The All-Share Index (ASI), which opened for the year at 38,243.19 increased by 6100.46 points to close at 44,343.65 on January 31, 2018.
Sustaining the momentum, the NSE Banking Index, Pension Index, Industrial Index and Premium Index all outperformed the market. The NSE Banking Index rose by 23.3 per cent to close at 586.16, up from 475.44 in December.
The NSE Pension Index increased by 21.9 per cent in January at 1,682.28, up from 1,379.74 in December. The NSE Industrial Index added 409.34 points to close in January at 2,384.93 as against 1,975.59 in December. Also, the NSE Premium Index closed higher at 3,090.56 as against 2,564.13 in December. The NSE 30 Index returned 15.6 per cent in January to be at par with the ASI.
The Main Board and Insurance Indexes rose by 13.3 per cent and 13 per cent to close at 1,941.25 and 157.43 in contrast to 1,713.69 and 139.37 as at December 2017. The Oil and Gas Index closed higher at 366.19, and that was an increase of over 10.74 per cent over 330.69 in December. The Lotus Islamic Index and Consumer Goods Index returned 7.6 per cent and 5.8 per cent in the first month of the year.
The only exception from the positive returns posted by ASI and other sub-sectoral indexes was NSE ASeM Index that closed lower by 1.4 per cent. The ASeM Index lost 15.64 points from 1,087.32 in December to close in January at 1,071.68.
Compared with the market returns in January 2017, only the NSE ASeM and NSE Banking Index closed marginally higher by 1 per cent. The NSE Pension remained neutral to market dynamics that month.
The NSE Insurance closed at negative 1 per cent; Industrial Index, -2 per cent; NSE Premium, ASI, Main Board each closed at -3 per cent. The Oil and Gas Index closed at -4 per cent, while the Lotus Islamic Index and Consumer Goods closed at -6 per cent and -7 per cent respectively.
The financial services sector was the most active in volume terms, with a total of 13.09 billion shares valuing N107.96 billion in 106,466 deals.
It was trailed by conglomerates with a turnover of 6.63 billion shares valued at N16.54 billion exchanged in 10,541 deals. Consumer Goods came third with a total of 1.07 billion shares worth N52.05 billion transacted in 27,854 deals.
The Oil and Gas sector sold 395.79 million shares valued at N5.19 billion traded in 7,483 deals.
Speaking on the market performance, while unveiling the firm’s 2018 Outlook for the Nigerian Economy and Financial Market, the the Group Managing Director of Afrinvest, Ike Chioke, said that having survived the policy misalignment that enveloped and weakened equities market return in 2016, the recent recovery momentum, which began in 2017, would be sustained in the near term.
“In these early days, we have seen market capitalisation and the NSE ASI at record highs, and we advocate a cautious, active trading strategy in the current bull market.”
He noted, however, that “during the first half of the year, we will see a lot of growth but the second half of the year will witness contraction because of the build up to 2019 general elections.
For his part, Capital Bancorp’s Managing Director, Mr Aigboje Higo, said the outlook for the Nigerian equities remains “strong and positive”, noting that while the market may fluctuate due to profit-taking in February, the month will end with a positive return.
He pointed out that most macroeconomic indicators including falling inflation rate, improving foreign exchange reserves, improving fiscal and monetary coordination, stable global crude oil price and corporate earnings will continue to create a rallying base for the Nigerian equities market.
“We expect all the positive factors that were present in January to continue into February. More so, investors will start anticipating corporate results in the weeks ahead, so we may see a very strong February, unless something drastic happened,” Higo said.