Renewed hope of stable polity boosts indices by 0.6%
Expectations of sustained political stability coupled with cheaper valuations, triggered buying interests on the equity sector of the Nigerian Stock Exchange (NSE), causing the All-Share Index (ASI) to appreciate marginnally by 0.6 per cent.
Specifically, at the close of trading last week, ASI and market capitalisation appreciated by 0.61 per cent to close the week at 31,069.37 points and N13.685 trillion respectively.Similarly, all other indices finished higher with the exception of the NSE MERI Value Index, which depreciated by 0.14 per cent, while the NSE ASeM Index closed flat.
Although the marrket declined for some days during the week, but the few marginal appreciations recorded by some bluechip stocks were able to push the two market indicators.Analysts believed that last week’s rebound signaled the gradual return of smart money to the market.
According to them, the low yield in advanced markets and continued geopolitical concerns about North Korea and Iran, coupled with the lingering trade dispute between China and U.S, have made emerging markets more attractive to foreign investors, especially given that many of these emerging markets are selling at their five-year low.
Specifically, the Chief Research Officer of Investdata Consulting, Ambrose Omodion, said investors are hopeful of political stability in the next three years, noting that the signing of the 2019 budget into law would enable government to start disbursement of capital projects funds.
“We applaud the government’s ‘project light house’, launched recently as the next phase of the Economic Recovery and Growth Plan (ERGP). However, the country’s economic managers must effectively change its implementation style to drive the economy in this new dispensation. “We expect the new cabinet to come with fresh ideas that will inject life into the economic reforms policy, going forward,” he said.
Further analysis of last week’ transactions showed that the market opened for four trading days last week as the Federal government declared Wednesday May 29, 2019 public holiday to mark the inauguration Day celebrations 2019.A turnover of 1.082 billion shares worth N18.111 billion was recored in 16,400 deals by investors on the floor of the exchange lower than a total of 1.698 billion units valued at N57.895 billion that exchanged hands in 24,328 deals during the preceeding week.
The financial services industry (measured by volume) led the activity chart with 809.990 million shares valued at N8.495 billion traded in 8,969 deals; thus contributing 74.84 per cent to the total equity turnover volume.The ICT industry followed with 69.705 million shares worth N5.411 billion in 1,754deals. The third place was Healthcare Industry with a turnover of 45.971 million shares worth N14.262 million in 139 deals.
Trading in the top three Equities namely, United Bank for Africa Plc, Access Bank Plc and Zenith Bank Plc (measured by volume) accounted for 351.014 million shares worth N3.737 billion in 4,088 deals, contributing 32.43 per cent to the total equity turnover volume.
Also traded during the week were a total of 290,130 units of Exchange Traded Products (ETPs) valued at N3.935 million executed in 16 deals compared with a total of 7,832 units valued at N48,890.00 transacted last week in 6 deals.A total of 1,057 units of Federal Government Bonds valued at N1.060 million were traded this week in seven deals.
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