Equities market investors lose N127bn in 9 months

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By Kayode Tokede

 On the heels of unstable economy and government unclear policies on economy, Equities market investors on The Nigerian Stock Exchange (NSE) have lost N127 billion in the past nine months.

According to Nigerian NewsDirect Investigation, market capitalisation of the equities market opened this year at N9.86 trillion to close on September 30, 2016 at N9.733 trillion.

The NSE All-Share Index also dropped by 1.1 per cent or 306.85 basis points to 28,335.40 basis points as at September 30, 2016 from 28,642.25 basis points it opened this year.

Considering the equities market on quarter on quarter (QoQ), All-Share Index has dropped by 11.6 per cent from 28, 642.25 basis points to 25,306.22 basis points while market capitalisation depreciated by N1.2 trillion to N8.704 trillion from N9.86 trillion.

By the second quarter ended June 30, the NSE All-Share Index appreciated by 3.34 per cent from 28,642.25 basis points to 29,597.79 basis points as at June 30, 2016.

The market capitalisation thus appreciated by N314 billion to N10.165 trillion from N9.86 trillion equities market opened in 2016.

Analysts at the equities market had attributed market growth in second quarter to ban on 41 items by Central Bank of Nigeria (CBN).

The equities market had recorded soaring profit-taking caused by unclear polices on exchange rate and Federal Government delayed 2016 budget, but it rebounded, bringing the year-to-date (YTD) growth to 11.6 per cent.

Further data gathered by our correspondent revealed that NSE-Main Board Index dropped by 4.6 per cent to 1,275.93 basis points from 1,337.85 basis points.

NSE 30 Index fell by two per cent from 1,287.67 basis points to 1,261.73 basis points

The out positive Index, NSE Banking Index by 2.3 per cent to 274.77 basis points as at September 30, 2016 from 268.49 basis points the equities market opened this year for trading activities.

Late filing of results and poor corporate earnings impinged NSE Insurance Index by 9.1 per cent from 142.61 basis points to 129.58 basis points while uncertainty in the oil & gas sector continued to weaken listed oil & gas shares as NSE Oil/Gas Index slumped by 5.8 per cent.

NSE Oil & Gas dropped from 356.56 basis points to 336.03 basis points as at September 30, 2016.

Furthermore, NSE Industrial dropped by 15.3 per cent to 1,834.31 basis points from 2,166.7 basis points while NSE Consumer Goods Index appreciated by 1.5 per cent to 757.4 basis points as against 746.19 basis points it opened this year.

While commenting, Analysts at InvestmentOne Limited expressed optimism in the remaining quarter of the year based on stability in foreign exchange market.

The Managing Director, Enterprise Stockbrokers Plc, Mr. Rotimi Fakayejo, expressed that the equities market has performed remarkably in 2016 despite severe macro economy challenges.

He was optimistic that the equities market in the remaining half of 2016 would witness the rebound of Foreign Portfolio Investment (FPI), fresh capital injection and proper implementation of CBN’s flexible foreign exchange.

In his words, “the second half of 2016 will be better based on Federal government and CBN plan to inject fresh capital into the economy and fully implementation of CBN foreign exchange policy.

“We may begin to see foreign investors returning to the equities market which is a recipe for our economy growth.

We strongly believe the nation’s economy will take sharp in the second half of the year,” he added