- The Nigerian equities market has recorded a cumulative gain of N1.67 trillion in market capitalization this week
- The market remains on track to close the week positive despite the profit takings witnessed on the NGX on Thursday that led to the reduction in market value.
- Market analysts have said that the positive performances in the market represented the regulatory flops the market has suffered over the years.
The Nigerian equities market has recorded a cumulative gain of N1.67 trillion in market capitalization in the last 4 days.
The market closed the week positively with the NGX All-Share Index ending the week up 5.49% despite the profit takings witnessed on the NGX on Thursday and Friday that led to the reduction in market value.
Investors’ sentiment has remained positive as the market cheered the suspension and arrest of the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, and the changes to Nigeria’s foreign exchange operational framework.
“Tinubunomics” an acronym for President Bola Tinubu’s economic policies appears to be having a ripple effect on Nigeria’s economy and it is no surprise that the capital market which is the barometer of the economy is having a positive outing.
According to available statistics obtained by Nairametrics, the equities market had on Tuesday following Emefiele’s suspension rallied to an all-time high, closing with capital gains of N1.215 trillion.
The All-Share Index (ASI)- the barometer that measures all share prices at the Nigerian Exchange (NGX), rose by 4.0% from its opening index of 55,930.97 points to close at 58,163.55 points.
Consequently, the aggregate market value of all quoted equities at the NGX crossed another threshold from its opening value of N30.455 trillion to close at N31.670 trillion. Turnover at the NGX doubled by 106.4% with the exchange of 1.19 billion shares valued at N19.23 billion in 10,269 deals.
Also, on Wednesday, the benchmark All Share Index (ASI) further rose, gaining 3.13% or 1,816.45 points to reach 59,985.1 points.
This follows the information confirming that the central bank has been instructed to buy and sell forex at market-determined prices. The market capitalization also increased by 3.26% to reach N32.7 trillion.
However, the domestic bourse on Thursday ended the two-day gaining streak as the benchmark index shed 1.32% to close at 59,195.21 points.
- Selloffs in telco heavyweight, MTNN (-3.83%), as well as Zenith Bank (-5.18%), and GTCO (-5.49%) underpinned the market’s weak performance despite gains in FBNH (+0.94%), ETI (+0.33%) and Fidelity Bank (+3.29%).
- Also, on Friday the local bourse maintained the bearish trend as the All-Share Index declined by 0.33% to close at 59,000.96 points.
- Selloffs in Zenith Bank (-3.28%), GTCO (-3.92%), and STANBIC (-3.70%) offset the gains in NB (+3.29), ETI (+0.98%) and Fidelity Bank (+0.43%) keeping the market’s overall performance in the red.
- Consequently, the year-to-date (YTD) return slid to 15.12%, while the market capitalization gained N1.67 billion w/w to close at N32.13 trillion.
Market analysts have said that the positive performances in the market represented the regulatory flops the market has suffered over the years.
What market operators are saying:
Group Executive Director, Investment Banking, Cordros Capital, Mr. Femi Ademola, said the markets appeared to have suffered significantly from the regulatory flip flops of the CBN in the past few years.
According to him, the regular interventions in the market and the deluge of circulars and policy actions from the apex bank had resulted in volatility in the market.
He noted that the implementation of the recent naira redesign policy affected the market quite negatively and pitched the populace against the CBN Governor.
- “Therefore, the immediate market reaction to the news of his suspension is likely to be positive,” Ademola said.
He, however, noted that the steps taken by the Federal Government within the next few days and weeks would determine the long-term reactions of the markets.
Managing Director, of Arthur Steven Asset Management Limited, Mr. Olatunde Amolegbe, said the financial markets “reacted as if a heavy boot had been lifted from its neck.”
- “Market expectations are that the imminent harmonization of the foreign exchange rate should bring renewed interest in Nigerian assets by foreign investors, be they portfolio or foreign direct investors.
- “Also, the potential for a lowering of interest rate as stated by the president in his inauguration speech will also be positive for the equities market since both asset classes have an inverse relationship.”
