By Chinwendu Obienyi
Investors in qouted securities at the Nigerian Exchange Limited (NGX) have continued to smile to the banks as transactions finished in the green zone in November, leading to a N629 billion gain following renewed interest in mid capitalised stocks as well as third quarter (Q3) earnings of listed equities.
Daily Sun analysis revealed that the month under review which started with the All Share Index (ASI) at 42,038.60 points, closed at 43,248.05 points, thus appreciating by 1,209.45 basis points while the market capitalisation which opened the month at N21.938 trillion, rose by N629 billion to close the month at N22.567 trillion.
Further analysis of the performance of the market in November showed that Year-To-Date (YtD), the market gained N1.5 trillion from N21.063 trillion it opened in 2021 to close November 30, 2021 at N22.567 trillion. Similarly, the NGX ASI gained 7.4 per cent or 2,977.33 basis points to 43,248.05 basis points as at November 30, 2021 from 40,270.72 basis points it opened this year.
In the month under review, the market had contended with massive exit of foreign investors, double digit inflation rate as well as FX crisis which has pushed investment to illiquidity. Analysts who spoke to Daily Sun, advocated more retail participation in the market while calling for more collaboration between the fiscal and monetary authorities.
The Head, Retail Investment, Investment Management Group, Chapel Hill Denham, Ayodeji Ebo, said the equities market has so far been struggling all thoughdue to the weak state of the economy, urging investors to see growth potential in undervalued stocks.
“We have seen that the market experienced significant growth in 2020 but that has not been replicated in 2021 and even if it is in early days, I still think the market is primed to finish the year on a positive note. What needs to be done is for more investor’ education, more retail participation as investors need to think and see the growth potential in stocks that are undervalued. By so doing, the market would finish strongly and this will boost investor’ confidence in the capital market”, He said.
Also speaking, The Head, Africa Strategy at Standard Chartered Bank, Samir Gadio, opined that Nigeria needs the collaboration of the fiscal and monetary authorities to fix the FX convertible issues.
For his part, the Managing Director, Highcap Securities Limited, David Adnori, attributed development in the stock market to impressive listed companies’ nine months corporate earnings and improved macroeconomic conditions.
According to him, “The rising price of crude oil also increased demand for stocks on the NGX. The growth may extend to year-end as most Q3 results are fantastic. The rebound in the stock market is expected to extend till year end because of steady increase in global oil prices.”