Stock Investors Gain N629bn In November On Impressive Results, Higher Oil Prices

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Investors’ investment on the Nigerian stock market rose by N629 billion in November 2021, following impressive nine months results of listed entities and improved oil prices.

Investors’ renewed interest in listed high-mid capitalised and undervalued stocks on the bourse was also responsible for the positive investment returns.

The market capitalisation was up by N629 billion to close at N22.567 trillion on November 30, 2021 from the N21.938 trillion the market opened for trading in November.

Similarly, the NGX All-Share Index also appreciated by 2.90 per cent from the 40,270.72 basis points it opened at the beginning November, to 43,248.05 basis points, it closed on November 30, 2021.

Meanwhile, year-to-date performance of the market stood at 7.4 per cent gain as at November 30, 2021.

The stock market in 2021 has been confronted with foreign investors’ exit, double-digit inflation rate that discourage investment as well as rising in fixed income rates, which have resulted in a liquidity exodus from the equities market.

A stockbroker and capital market analyst, Mr. Rotimi Fakayejo attributed the oil and gas index performance growth to impressive corporate earnings posted by listed petroleum marketing companies, stressing that the enactment of the Petroleum Industry Act also played a critical role in lifting the index higher in the 10 months under review.

Also, the managing director, Highcap Securities Limited, Mr. David Adnori, attributed stock market to impressive listed companies’ nine months corporate earnings and improved macroeconomic conditions.

According to him, the rising price of crude oil also increased demand for stocks on the NGX. The growth may extend to year end as most Q3 results are fantastic.

He added that, “the rebound in the stock market is expected to extend till year ended because of steady increase in global oil prices. The recovery of the stock market could have been better but insecurity in the nation’s led to hike in inflation rate and investors have to react negatively.”

The chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion, said, despite the volatility and selling pressure in November, the market closed the month positive, ushering in a buy and bullish December as players continue to reposition their portfolio in line with dividend expectations for the current year-end.

He added that, “we expect the market to close positively this year, with seasonality and cycles likely to influence equity prices ahead of year-end window dressing.

“The low volume traded in the midst of pullbacks is creating new buy opportunities on the strength of the Q3 numbers. Also, candlestick formation and volume traded during the session revealed that institutional players are not selling but positioning in blue-chip companies, as the index slide on a light volume.

It is equally noteworthy that during a ranging market many players seat on the fence waiting for a breakout or down before jumping into any position. Even as many stocks are trading within their buy ranges, a situation expected to attract more funds into the stock market, given the dividend yield capable of serving as a hedge against inflation.”