NSE: Gains in cheap stocks lift equity market by N1.17trn in one month

The Nigerian Stock Exchange (NSE) gained N1.17 trillion in May as investors renewed interest on cheap fundamentals, stocks lead to price appreciation.

The market capitalization closed May at N13.17trillion from N11.997trillion it opened for trading.

Consequently, the NSE All-Share Index gained 9.76 per cent in May from 23,021.01 basis points to 25,267.82 basis points.

All the NSE indices appreciated in May with the Industrial Good Index leading the gainers chart, followed by the NSE Pension Index.

For the Month under review, NSE Industrial Goods Index gained 18.97 per cent to 1,204.70 basis points from 1,168.75 basis points while NSE Pension index rose by 16.10 per cent from 989.59 basis points to 1,020.88 basis points in May.

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The NSE Banking Index also gained 11.98 per cent to 304.11 basis points from 302.77 basis points while the NSE Insurance Index gained 8.15 per cent to 131.81 basis points from 127.06 basis points.

The Chief Executive Officer, NSE, Mr Oscar Onyema, during the stakeholder engagement series last week said The Exchange has remained attractive in terms of dividend yield and market valuation ratios, with the All-Share Index outperforming peer exchanges in Africa.

He said, “We have also experienced increased activity from domestic investors who currently represent 59 per cent of equity value traded for the first time in ten years, as well as from retail participants who are taking advantage of low valuations and high dividends.”

Looking at other asset classes,. Onyema reported that the market capitalization in the fixed income space has risen by 8.91per cent to N14.02trillion ($36.32billion) from N12.92trillion ($35.44billion) as at the end of 2019 as a result of increased listing activity from the Federal Government and Nigerian corporates.

Speaking to the resilience of the capital market, the Acting Director-General, Securities and Exchange Commission (SEC), Ms Mary Uduk, represented by Mr Okey Umeano, Head, Office of the Chief Economist at the SEC said, “We are proud to report that our market continues to function seamlessly and perform positively during this pandemic. As the regulator of the market, we recognize that COVID-19 has ushered us into a new normal that is here to stay, and we are committed to performing our activities in the best possible way to make the Nigerian capital market attractive and responsive.”

Analysts at Cordros capital explained, “In our opinion, risks remain on the horizon due to a combination of the increasing number of COVID-19 cases in Nigeria and weak economic conditions.

“Thus, we continue to advise investors to trade cautiously and seek trading opportunities in only fundamentally justified stocks.”