NSE Ends Q3 2017 With N765bn Gains

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By OLUSHOLA BELLO, Lagos –

Investments on the Nigerian Stock Exchange (NSE) has soared by N765 billion in the third quarter of the year ended September 29, 2017.

Specifically, the NSE market capitalisation, which represents total value of shares on the Exchange, went up by N765 billion to N12.217 trillion at the close of trading on September 29, 2017, against N11.452 trillion at the end of June 30, 2017.

Similarly, the NSE All Share Index, which measures the price movement of stocks traded on the Exchange, surged by 2,322.50 points or 7.01 per cent to 35,439.98 points at the close of business on September 29, 2017.

Reviewing the sectoral indices for the period under review showed that all the indices closed positive except Oil and Gas, which declined by 13.10 per cent.

NSE Consumer Good index led the gainers chart by 15.89 per cent, it was followed by the Banking index with a gain of 10.60 per cent, while NSE 30 appreciated by 7.84 per cent. NSE Industrial index appreciated by 2.69 per cent, while NSE Insurance index rose by 1.36 per cent.

Speaking on the stock market performance under the period review, the managing director of Highcap Securities Limited, Mr. David Adnori said, investors’ confidence has been reinforced by relatively increased corporate earnings that are consistent with forecasts while some companies actually exceeded forecasts.

He added that business environment in Nigeria is becoming more conducive with the stability in forex market and reduced insecurity level. A range of government policies aimed at stimulating economic growth and the use of made in Nigeria initiative have combined to strengthen investor confidence in the economy.

He said with the economy out of recession, however, budgetary discipline, fiscal incentives and enhanced securities network among others would define the extent to which the economy can grow.

Managing director of APT Securities and Funds Limited, Mallam Kurifi Garuba said “After posting a negative return in 2016 full year, Nigerian equities rebounded strongly in the nine months to September, with the All Share Index posting 31.87 per cent gain.”

According to him, noteworthy, the bullish proceedings in the third quarter would have been more stellar, save for the selloff that dominated the most of the month of September on gloomy investors’ sentiments.

Meanwhile, market operators and financial analysts have expressed optimism of better market performance in their projection for the fourth quarter of 2017. They stressed that improvement in the monetary and fiscal policies, among other factors such as global oil prices will determine the sustainability of the bullish run.

Garuba said that “We expect NSEASI outing in October to be quite bullish compared to last month bumpy outlook as investors anticipate third quarter result. We also expect some actions by the government in governance and fiscal front lines to impact the equities market.”

Chief operating officer of InvestData Limited, Mr. Ambrose Omordion said, the recent positive macro-economic indices released by NBS and CBN are indicators that support economic recovery despite the numbers are marginally in green to show more need to be done to drive substantial growth in the system.

According to him, the second quarter GDP growth of 0.55 per cent, as inflation rate for August continued to decline 16.01 per cent from 16.05 per cent in July, the nation foreign reserves recently hit $33 billion and is likely to move higher as oil price in the international market trade at $59.92.

PMI for the month of September was up to 55.3 point  from 53.6 point recorded in August that confirm the seeming economic recovery in Nigeria as  manufacturing sector  equally looking up to reflect the  impact of CBN intervention policy in the forex market on the  real sector and the economy at large.

He noted that the expected third quarter earnings season in the month in October are likely to impact much on the market the depending on the strength of the numbers especially when the numbers beat market estimate, saying that October, being the first month of the last quarter of the year, investors should expect the market to keep oscillating in the new month, just as economic policy direction from the government would further strengthen market fundamentals and the economic recovery.

He pointed out that the recent market correction supports low valuation in the market despite the mixed sentiments as many stocks still remain undervalued on the strength of the intrinsic value that should guide the investing public as they seek to invest profitably for the rest of the year.

Omordion added that traders and investors who understand the dynamics of the market and the importance of combining fundamental and technical analysis in making investment decisions in the stock market would take this opportunity of pullback to position in some sectors for short, medium and long-term gains.

Sectors that could be looked at for juicy returns this month and beyond, Omordion said, include, the fast moving consumer goods, insurance, banking, agribusiness, building material, oil and gas after a careful study of the recent price pattern and fundamental data available in the market ahead of third quarter earnings season.

He said “this is a very important season in stock market cycle in taking final investment decisions for the year as numbers expected at that period give insight into what should be expected at the end of December financial year end.”