06-25-2019, 10:53 AM
Nigerian equities trading dwindles by N619b
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The momentum of trading on Nigerian equities has slowed down considerably over the past five months as investors continue to weigh potential returns against macroeconomic risks.
Official data obtained at the weekend at the Nigerian Stock Exchange (NSE) indicated that the value of transactions at the Exchange dropped by 44 per cent or N619 billion in the past five months compared with the corresponding period of 2018.
Total transactions, in terms of value, for the five-month period ended May 31, 2019 stood at N790.31 billion compared with N1.409 trillion recorded in comparable period of 2018, representing a drop of 44 per cent or N619 billion.
The report indicated a slowdown in both foreign and domestic participation in the equities market. Total transactions by foreign portfolio investors halved from N697.3 billion in first five months of last year to N376.05 billion in the first five months of this year. This represented a drop of N321.25 billion or 46.07 per cent. Total domestic transactions also declined by 41.8 per cent or N297.92 billion from N712.17 billion recorded in the five-month period ended May, last year to N414.25 billion in the first five months of the year.
Further analysis showed that domestic investors continued to dominate transactions during the period. Domestic investors contributed 51.02 per cent of total transactions during the period ended May 2019, inching up from 50.53 per cent recorded during the period ended May 2018. Foreign participation dropped slightly from 49.47 per cent last year to 48.98 per cent this year.
Analysts at Cordros Securities said the outlook for the equities market in the short to medium term remains conservative, citing absence of immediate positive catalyst.
“We reiterate our view that the blend of a compelling valuation story, together with positive macroeconomic picture leaves scope for market recovery in the medium term. However, we guide investors to tread the cautious trading path in the short term,” Cordros Securities stated at the weekend.
The slowdown in the momentum of transactions partly reflected the bearish pricing trend that had characterised transactions at the Exchange this year. Nigerian equities have traded mostly on the negative this year, although the listing of Nigeria’s largest telecommunication company, MTN Nigeria Communications Plc, provided a breather in May.
Aggregate market value of all quoted companies at the NSE closed May 2019 at N13.685 trillion, N2.726 trillion above the opening value of N10.959 trillion for the month. The gains of N2.726 trillion included entry listing value of N1.83 trillion added by the listing of the 20.35 billion ordinary shares of MTN Nigeria at N90 per share.
The benchmark index for Nigerian equities market, the All Share Index (ASI), indicated average return of 6.55 per cent for May 2019, equivalent to net capital gain of N718 billion when adjusted for the unabsorbed effect of the new listing. The ASI, which doubles as Nigeria’s sovereign equities index, rose from May 2019’s opening index of 29,159.74 points to close the month at 31,069.37 points.
The May rally moderated the negative average year-to-date return, which had opened the month at -7.22 per cent, to -1.15 per cent for the five-month period. The ASI and aggregate market value of quoted equities had opened 2019 at 31,430.50 points and N11.721 trillion.
Nigerian equities had suffered a major contraction in April as the bearishness at the stock market defied earnings reports and dividend recommendations. Quoted equities had recorded net loss of N714 billion in April. The ASI dropped from April’s opening index of 31,041.42 points to close the month at 29,159.74 points, representing average month-on-month decline of 6.06 per cent. Aggregate market value of all quoted equities also dropped from the month’s opening value of N11.672 trillion to close at N10.958 trillion.
Nigerian equities had closed the first quarter with net capital depreciation of N49 billion, a sharp reversal from the bullish trading that saw equities with net capital gain of N1.38 trillion in first quarter of 2018. The performance in April further exacerbated the decline at the Nigerian equities market, which had suffered average decline of 17.81 per cent or about N1.89 trillion in 2018.
With the decline in April, average decline in investors’ portfolio over the past 16 months had stood at 25.03 per cent, with net decline of N2.65 trillion in total market value of quoted equities. Meanwhile, Nigerian equities had recorded net capital gain of N4.36 trillion or average gain of 42.30 per cent in 2017, implying considerable upside for investors despite the decline in the past 16 months.
The ASI opened 2018 at 38,243.19 points while aggregate market value of all quoted equities at the NSE opened 2018 at N13.609 trillion.
Further analysis showed that the market started the year with a loss in January, rallied to appreciable recovery in February and relapsed into negative again in March.
Nigerian equities lost N326 billion in January 2019, with average decline of 1.82 per cent. The ASI and market value of equities had closed January 2019 at 30,557.20 and N11.395 trillion.
In February, investors in Nigerian equities netted N433 billion in capital gains as the stock market staged a major recovery. Average return for the month stood at 3.80 per cent. The ASI and market value of quoted equities had closed February higher at 31,718.70 points and N11.828 trillion. The market rounded off the first quarter with a net loss of N156 billion and average decline of 2.135 per cent in March, this year.
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[url=https://thenationonlineng.net/wp-content/uploads/2019/06/African-1.jpg]
The momentum of trading on Nigerian equities has slowed down considerably over the past five months as investors continue to weigh potential returns against macroeconomic risks.
Official data obtained at the weekend at the Nigerian Stock Exchange (NSE) indicated that the value of transactions at the Exchange dropped by 44 per cent or N619 billion in the past five months compared with the corresponding period of 2018.
Total transactions, in terms of value, for the five-month period ended May 31, 2019 stood at N790.31 billion compared with N1.409 trillion recorded in comparable period of 2018, representing a drop of 44 per cent or N619 billion.
The report indicated a slowdown in both foreign and domestic participation in the equities market. Total transactions by foreign portfolio investors halved from N697.3 billion in first five months of last year to N376.05 billion in the first five months of this year. This represented a drop of N321.25 billion or 46.07 per cent. Total domestic transactions also declined by 41.8 per cent or N297.92 billion from N712.17 billion recorded in the five-month period ended May, last year to N414.25 billion in the first five months of the year.
Further analysis showed that domestic investors continued to dominate transactions during the period. Domestic investors contributed 51.02 per cent of total transactions during the period ended May 2019, inching up from 50.53 per cent recorded during the period ended May 2018. Foreign participation dropped slightly from 49.47 per cent last year to 48.98 per cent this year.
Analysts at Cordros Securities said the outlook for the equities market in the short to medium term remains conservative, citing absence of immediate positive catalyst.
“We reiterate our view that the blend of a compelling valuation story, together with positive macroeconomic picture leaves scope for market recovery in the medium term. However, we guide investors to tread the cautious trading path in the short term,” Cordros Securities stated at the weekend.
The slowdown in the momentum of transactions partly reflected the bearish pricing trend that had characterised transactions at the Exchange this year. Nigerian equities have traded mostly on the negative this year, although the listing of Nigeria’s largest telecommunication company, MTN Nigeria Communications Plc, provided a breather in May.
Aggregate market value of all quoted companies at the NSE closed May 2019 at N13.685 trillion, N2.726 trillion above the opening value of N10.959 trillion for the month. The gains of N2.726 trillion included entry listing value of N1.83 trillion added by the listing of the 20.35 billion ordinary shares of MTN Nigeria at N90 per share.
The benchmark index for Nigerian equities market, the All Share Index (ASI), indicated average return of 6.55 per cent for May 2019, equivalent to net capital gain of N718 billion when adjusted for the unabsorbed effect of the new listing. The ASI, which doubles as Nigeria’s sovereign equities index, rose from May 2019’s opening index of 29,159.74 points to close the month at 31,069.37 points.
The May rally moderated the negative average year-to-date return, which had opened the month at -7.22 per cent, to -1.15 per cent for the five-month period. The ASI and aggregate market value of quoted equities had opened 2019 at 31,430.50 points and N11.721 trillion.
Nigerian equities had suffered a major contraction in April as the bearishness at the stock market defied earnings reports and dividend recommendations. Quoted equities had recorded net loss of N714 billion in April. The ASI dropped from April’s opening index of 31,041.42 points to close the month at 29,159.74 points, representing average month-on-month decline of 6.06 per cent. Aggregate market value of all quoted equities also dropped from the month’s opening value of N11.672 trillion to close at N10.958 trillion.
Nigerian equities had closed the first quarter with net capital depreciation of N49 billion, a sharp reversal from the bullish trading that saw equities with net capital gain of N1.38 trillion in first quarter of 2018. The performance in April further exacerbated the decline at the Nigerian equities market, which had suffered average decline of 17.81 per cent or about N1.89 trillion in 2018.
With the decline in April, average decline in investors’ portfolio over the past 16 months had stood at 25.03 per cent, with net decline of N2.65 trillion in total market value of quoted equities. Meanwhile, Nigerian equities had recorded net capital gain of N4.36 trillion or average gain of 42.30 per cent in 2017, implying considerable upside for investors despite the decline in the past 16 months.
The ASI opened 2018 at 38,243.19 points while aggregate market value of all quoted equities at the NSE opened 2018 at N13.609 trillion.
Further analysis showed that the market started the year with a loss in January, rallied to appreciable recovery in February and relapsed into negative again in March.
Nigerian equities lost N326 billion in January 2019, with average decline of 1.82 per cent. The ASI and market value of equities had closed January 2019 at 30,557.20 and N11.395 trillion.
In February, investors in Nigerian equities netted N433 billion in capital gains as the stock market staged a major recovery. Average return for the month stood at 3.80 per cent. The ASI and market value of quoted equities had closed February higher at 31,718.70 points and N11.828 trillion. The market rounded off the first quarter with a net loss of N156 billion and average decline of 2.135 per cent in March, this year.