Some investors in the stock market are looking back at the first quarter (Q1) of 2018 with smiles as their investments closed with higher value. The market, which recovered from a three-year decline to close last year on positive note, maintained the momentum in the beginning of 2018. That bullish trend was sustained and boosted the market to a record high on February 2, 2018 when the Nigerian Stock Exchange (NSE) All-Share Index hit 44,639.99, while market capitalisation stood at N16.019 trillion. On that date, the year-to-date growth was 16.7 per cent.
However, profit taking, portfolio rebalancing by institutional investors combined with other factors to later attract the bears. That bearish trend persisted throughout March to reduce the YTD growth 8.5 per cent at the end of the first quarter (Q1) last week.
Checks showed that despite the reduction in the YTD growth, some stocks still fetched investors significant capital growth, thereby making them not to regret their investments in the equities market.
For instance, Unity Bank Plc recorded a gain of 130 per cent in the Q1, just as Caverton Offshore Support Group Plc appreciated by 106 per cent. Investors in Cement Company of Northern Nigeria Plc gained 96.8 per cent, while Wema Bank Plc recorded a growth of 90.3 per cent. NPF Microfinance Bank recorded a growth of 69.6 per cent, just as N.E.M Insurance Plc, Eterna Plc and Sterling Bank Plc chalked up 65 per cent, 63.7 per cent and 62 per cent in that order.
Other top price gainers for the quarter included: FCMB Group Plc (60.8 per cent); Glaxosmithkline Consumers Nigeria Plc (57.3 per cent); Skye Bank Plc, Fidson Healthcare (54 per cent apiece);Beta Glass Plc (47.5 per cent); FBN Holdings Plc (42 per cent); Cutix Plc (39 per cent); Unilever Nigeria Plc (34.1 per cent); C & I Leasing Plc (33.3 per cent); Dangote Flour Mills Plc (31.2 per cent);Flour Mills of Nigeria Plc (28.6 per cent) and Jaiz Bank Plc 28 per cent).
Although the market witnessed a decline in the last month of the Q1, the 8.5 per cent recorded for the whole quarter was still in line with the projections made by analysts.
Analysts had said the market would close the year with a growth. According to analysts at Afrinvest West Africa, “Our near term outlook for the equity market remains positive due to improving fiscal and current account balances – supported by rising oil prices – which is expected to have positive knock-on impacts on FX market stability and earnings. However, a major downside risk is the upcoming general elections which could weigh on polity stability and lead to more short-term thinking in economic policymaking.”
Similarly, analysts at Vetiva Capital said: “Despite the 2017 equity market rally driven by a partial liberalisation of the country’s exchange rate regime, the Nigerian Stock Exchange remains relatively undervalued.”
They have therefore projected further gains for the equities market in 2018, with an estimated full year return of between 15 per cent and 20 per cent.