Nigerian Stock Market Records Year-to-Date Growth of 3.3% as investors shun political risks

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Employees work on the trading floor at the Nigerian Stock Exchange (NSE) in Lagos, Nigeria, on Monday, Oct. 26, 2015. Nigeria plans to create a $25 billion fund with public and private financing to modernize infrastructure and avoid a recession, Vice President Yemi Osinbajo said. Photographer: George Osodi/Bloomberg via Getty Images

The Nigerian equities market has recorded a year-to-date (YTD) growth of 3.3 per cent following sustained bullish trading as investors took advantage of attractive prices of stocks. The market, which suffered a decline in 2018, recorded further losses in the month of January due apprehensions by investors over political uncertainties around the general elections in the country.

However, following the oversold positions of most stocks and their attractive valuations, some investors have been ignoring the political risks and increased their demand for stocks since last week. This renewed demand has been sustained, making the Nigerian Stock Exchange (NSE) All-Share Index to appreciate by 2.1 per cent to close at 32,462.30 yesterday, while market capitalisation added N253.7 billion to be at N12.1 trillion. Consequently, the market YTD performance has hit 3.3 per cent.

The market was highly bullish as 38 stocks appreciated compared with 14 that depreciated. Dangote Flour Mills Plc, Livestock Feeds Plc, NPF Microfinance Bank Plc and Jaiz Bank Plc led the price gainers with 10 per cent apiece. They were followed by Champion Breweries Plc with 9.8 per cent, while Union Bank of Nigeria Plc and Wema Bank Plc garnered 9.6 per cent and 9.2 per cent respectively.

Other top price gainers included: Transcorp Plc (8.9 per cent); Neimeth International Pharmaceuticals Plc (8.7 per cent); Royal Exchange Plc (7.6 per cent); Union Diagnostics and Clinical Services Plc ( 7.4 per cent); Oando Plc (7.2 per cent); Seplat (6.1 per cent), Nestle Nigeria Plc and Flour Mills of Nigeria Plc (6.0 per cent apiece.

Flour Mills of Nigeria Plc is currently raising N6 billion in the sixth series of its N100 billion Commercial Paper(CP) programme in a bid to support its short-term funding needs. The tenor is for 180 days while the effective yield is 14.7 per cent. The offer, which opened last Thursday, will close today.

Meanwhile, Regency Alliance Insurance Plc led the price losers with 8.0 per cent, trailed by UAC Property Development Company Plc with 7.8 per cent, while Unity Bank Plc and AIICO Insurance Plc shed 5.9 per cent and 5.1 per cent respectively.

Activity level also improved as volume and value traded for the day increased by 5.5 per cent and 42.2 per cent to 580.4 million units and N8.0 billion respectively. The most traded stocks by volume were Diamond Bank (125.8 million shares ), Zenith Bank (63.2 million shares) and Guaranty Trust Bank (57.1 million share) while for the most traded stocks by value, GTBank (N2.2 billion), Zenith Bank (N1.6 billion) and Dangote Cement (N1.5 billion) were the top stocks.

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