Equity trading on the Nigerian Stock Exchange, NSE recorded a marginal downturn in the third quarter of 2014, with market indicators, market capitalisation and All Share Index dropping 3.3 per cent each, a situation market operators attributed to political uncertainty and insurgency.
A cursory review of the stock market performance showed that investors lost N463 billion, as capitalisation dropped from N14.070 trillion in the first day of trading in July to close at N13.607 trillion at the end of September 2014.
In the same vein, the All Share Index, which opened in July at 42,610.30 points dropped by 3.3 per cent or 1400 basis points . NSE market capitalisation is the total value of companies quoted on the exchange. It is measured by the stock prices times the number of shares issued by all companies quoted on the exchange, while the All Share Index is the total market (broad-base) index, reflecting the total movement of all prices of shares quoted on the NSE.
Meanwhile, analysis of the top five gainers for the month of September shows that Guinness Nigeria Plc led the chart with a gain of N34.98 to close at N214.98 from N180.00 it opened, followed by 7-UP Bottling Company Plc rising by N13.73 to close N147.73 from N 134.00 it opened.
Nestle Foods Nigeria Plc garnered N10.01 to close at N1,090 from N1,079.99, followed by WAPCO Lafarge Africa Plc rising by N9.51 to close at N 126.76 from N117.25, while Stanbic IBTC Holdings Plc gained N3.60 to close at N33.60 from 30.00.
On the laggard side, Forte Oil Plc led the chart dropping by N4.99 to close at N225.00 from N229, followed by Flour Mills Nigeria Plc, which nosedived by N6.13 to close at N61.98 from N68.11.
Cadbury Nigeria Plc dropped by N7.35 to close at N52.50 from N59.85 followed by Conoil Plc, which dropped by N14.04 to close at N47.01 from N61.05, while Seplat Petroleum Development Company dipped by N35.00 to close at N645.00 from N680.00 it opened during the month under review.
Reacting on the performance of the third quarter, the Managing Director/CEO, Partnership Investment Company Plc, Mr. Victor Ogiemwonyi, said that the market has fared better than expected under the prevailing circumstance of uncertainty over insurgency in the North East and the upcoming general election next year.
“The market has reacted the way it should given the uncertainty in the environment. The elections are ahead of us, so is the in retractable insurgency that we have in Boko Haram. All these are sources of instability and uncertainty.
“Investors invest for the future, if the future is not so clear and predictable, the usual reaction is to wait and see. The market under these circumstances has fared better than expected, Ogiemwonyi said. He noted that there were minor corrections in the most promising stocks and a few major down ward slide for stocks that looked shaky within the period.
However, he stated that the third quarter results of companies so far published should give the investing public confidence that the year will end well for most companies, saying, “The better results will better reflect the market after the elections, if everything goes well, and the market will bounce back accordingly. The regulators are doing all they can now. The rules are better enforced, the necessary rules to better protect investors are been put in place.
“The current downward trend in the market is an economy wide issues.
The market will be back when investors see better visibility of the future. The pending elections may bring in new players with new policies, investors want to know if there will be changes that are positive or negative to the economy, to allow them make better decision for the future,” he added.
He noted that except for movement which would come with portfolio managers making adjustment to their portfolio, there would not be major difference in activities in the market in the last quarter from what it was in the third quarter of the year.
”There might also be some flash of money that may come to the market as the election spending filters into the wider economy. But this will not really reflect until the tail end of the first quarter and the second quarter particularly, if the elections go well,” he said.
Also speaking, Mr. Dr. David Walter Ogogo, Registrar/CEO, Institute of Capital Market Registrar, ICMR, said that the capital market seems to have fully recovered from the 2008/2009 experience.
Enumerating some of the initiatives that have helped to impact the market in the first three quarters in 2014, Ogogo said that the Capital Market Committee, CMC, under the leadership of SEC is putting together a 10 year master plan for the market and has also introduced the new minimum capital base for all operators.
“Though this has generated some issues in some quarters, personally, I feel that SEC consulted widely enough before the introduction,” he opined. “The Website of SEC has been improved upon. The website is now much more educative and informative. The Nigerian Stock Exchange, NSE, has introduced a number of new products that are very promising,” he added.
He, however, called on the SEC to ensure that the 10 year master plan for capital market now being finalised, is launched in the last quarter, while the West Africa Capital Market Integration project should be vigorously pursued.
Furthermore, he said that the report of the dematerialisation committee should be reviewed, adopted and implemented. “In all, SEC should do well to implement the decisions or recommendations of committees set up by them for the good of the market so as to enhance investor confidence.”
- Culled from: http://www.vanguardngr.com
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