By Chinwendu Obienyi

 

Amid the challenges of Nigeria’s parlous economy, its securities market recorded improved performance as investors’ interest surged by N522 billion in September 2021.

Daily Sun analysis of the market’s performance in the month under review revealed that the Nigerian Exchange Limited (NGX) All Share Index (ASI) which opened in September at 39,219.61 points, appreciated by 1,001.56 points to close the month at 40,221.17 points.

That also impacted market capitalisation of listed securities which gained N522 billion within the period under review to close at N20.955 trillion from N20.434 trillion recorded in August 2021.

Reacting to the market’s performance, capital market operators attributed the improved performance to the strong first half (H1), 2021 corporate earnings and improving macro-economic indices shown in the second quarter (Q2) GDP quarter-on-quarter growth of 5.01 per cent.

According to them, this confirms the recovery in the country’s economic position, offering an insight into what the future holds for the stock market and economy in general.

Although the market had its bullish and bearish moments, the operators observed that the foreign exchange (FX) crisis as well as inflation spiral led to a total of N139.39 billion being withdrawn from the NGX between January and August 2021 by foreign investors.

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According to the Domestic & Foreign Portfolio Investment report of the NGX for August 2021, foreign inflows dropped to N123.46 billion from N161.31 billion in 2020 year-to-date (ytd) while foreign outflows stood at N139.39 billion from N308.89 billion in 2020.

The report indicated that as at August 31, 2021, total transactions at the nation’s bourse fell marginally by 0.39 per cent from N89.77 billion (about $218.20 million) in July 2021 to N89.42 billion (about $217.53 million) in August 2021. 

The performance of the current month when compared to August 2020 (N94.45 billion) figures revealed that total transactions decreased by 5.33 per cent.

Speaking to Daily Sun via telephone, Managing Director, Highcap Securities, David Adonri, said the market had regained the August lost grounds having maintained a positive momentum in September.

“We saw a replication of recovery in the month of August and this had an effect on the performance of the market in September considering the fact that the macro-economic conditions are improving with increasing GDP and drop in inflation rate. 

Yes it was a surprise that this gain was recorded despite the FX crisis, however, there is room for more improvement and I think the market is primed for a strong finish this year”, He said.

Meanwhile, bargain hunting in banking stocks dominated transactions at the NGX resulting in the ASI rising by 1.6 per cent week-on-week (w/w) to close at 40,868.36 points.

Market data obtained from the NGX’s website, shows that the Month-to-Date (MTD) and YTD  (Year-to-Date) return increased to +1.6 per cent and +1.5 per cent, respectively while market capitalisation grew by N340 billion to close at N21.296 trillion.