NIGERIA: NSE sustains momentum, gains N520bn in two weeks

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Trading on the Nigerian Stocks Exchange, NSE sustained the momentum gained in 2012, with values of listed equities appreciating by N520.12 billion in the first two weeks of the year.

During this period, market capitalisation which measures value of listed equities rose to N9.49 trillion on January 15th, appreciating by 5.8 per cent, from N8.97 trillion at the end of 2012.

The All Share Index equally rose by 5.73 per cent or 1608.14 points to close at 29,686.95 points from 28,078.81 points.

Analysts attributed this to the positive close of activities last year, adding that it is likely that the major market indicators will continue to record significant improvement.

Strong momentum was recorded on the prices of equities in the banking sub-sector, emerging as the most dominant, as analysts hinged this on the expected full year results to be released by the banks and other financial companies in the next few weeks.

For instance, Fidelity Bank Plc rose by 46.7 per cent or N1.07 to close at N3.36 per share on 15th January from N2.29 per share it opened the year. United Bank for Africa Plc appreciated by 44.5 per cent or N2.03 to close at N6.59 per share from N4.56 per share. Skye Bank Plc rose by 43 per cent or N1.85 to close at N6.15 per share from N4.30 per shares.

Others include Sterling Bank Plc 38.2 per cent, First City Monument Bank Plc 35.5 per cent, Diamond Bank Plc 33.5 per cent,  among others.

Shares of Eternal Plc and Forte Oil Plc in the Petroleum and Petroleum Sub-Sector also recorded impressive performance, with 45 per cent and 33.5 per cent price gains respectively, among other equities with strong investors’ patronage.

However, only few equities recorded share price loss, with John Holt dropping by 22.1 per cent to close at N2.65 per share from N3.40 per share. Neimeth International Pharmaceutical Company Plc also lost 7.1 per cent to close at N0.91 per share while MRS Oil Nigeria Plc dropped by N4.97 per cent to close at N22.58 per share, among other losers.

Trading activities within the first fifteen days were characterised by increased investors’ patronage. However, market succumbed to speculative pressure as the key benchmark indices pulled back on Wednesday and Thursday last week by -0.46 per cent and -0.90 per cent respectively on the back strong profit-taking tendency.

Commenting on the two days decline, Analysts from Partnership Investment Company Plc said,  “The market rally continued despite closing on a negative note for two trading days of the week, as profit takers sought gains. Bargain activities have however outweighed profit taking. We expect this to continue in the coming week in anticipation of most banks year-end financial results.

“And so, we call on investors to maintain a medium to long-term investment strategy based on market fundamentals. Bargain hunting in the financial services, consumer goods and agriculture sectors should not preclude profit taking.”

Market Analysts expect the bullish run to continue in 2013. They expect the equities market to trade higher as investors will take advantage of the current attractive valuation in the market for strategic positioning.

Given the level of performance in 2012, Mr. Wusu, Head of Research at Sterling Capital Markets Limited said performance in 2013 would be driven more by strong macroeconomic environment, good corporate performance and companies’ fundamentals.

He noted that the expected monetary policy easing in 2013 would likely induce investment switch to favour stock market.

On their part, Analysts from Partnership Investment Company Plc said that the equities market still hold a lot of promise for wise and long-term investors, just as Analysts from FSDH Securities Limited advised investors to consider investment opportunities in strategic stocks, as they have good fundamentals that can generate good returns in the medium to long- term.

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