NSE tops world’s equity market performance in June

The prevalence of a positive performance in Nigeria’s equities market has resulted in placing the country’s stock market as a best performer amongst other world exchanges in the month of June.

An analysis by FSDH researchers of 16 selected stock markets across America, Europe, Africa and Asia positions the Nigeria’s Stock Exchange (NSE) All-Share Index (ASI) firmly at the top of the chart with a month on month (MoM) increase of 12.27 percent.
The NSE ASI recorded the highest MoM appreciation of 12.27% (a gain of 12.11% in US$) to close at 33,117.48 points with YTD gains at 23.23% as at June 30, 2017.

This was followed by the Nairobi All Share Index (Kenya) with a MoM gain of 3.05%, and a YTD gain of 14.68%.
On the flip side of the chart, The FTSE/JSE Africa All Share (South Africa) Index recorded the highest MoM loss of 3.64%, but recorded a YTD gain of 1.89%. This was followed by the CAC 40 Index (France) with a MoM depreciation of 3.08% but a YTD appreciation of 5.31%.

Other market Index analysed were the Dow Jones Industrial Average, this closed the month of June with a MoM appreciation of 1.62%, the S&P 500 index was up 0.48%, The brazil stock market increased 0.30%, Ghana’s ASI improved 2.34%, Japan’s Nikkei 225 added 1.95%, China’s Shanghai Stock Exchange Composite Index gained 2.41% and Hong Kong’s Hang Send Index was up by 0.41% MoM.

European stocks ended the month on a lower note with UK’s FTSE100 index down by 2.76% posting the second biggest MoM loss after France. Germany was next with a MoM decline of 2.30 % while the Swiss Market Index closed negative at 1.22%, Nasdaq Composite trailed with a MoM depreciation of 0.94% and India’s S&P BSE Sensex Index completed the 16 list of analysed stock market’s with a decline of 0.72%

According to FSDH research analyst, the improved macroeconomic environment; especially the increased supply of foreign exchange which has resulted in buoyed investors’ sentiments continues to have a positive impact on Nigeria’s equity market.

The market capitalisation similarly recorded a MoM gain of 12.30% (a gain of 12.14% in US$) to close at N11.45trn (US$37.44bn). The difference in the rate of change between the market capitalization and the Index was due to the addition of 396.79mn ordinary shares to the outstanding shares of Oando Plc on The Nigerian Stock Exchange (NSE), following the conclusion of a debt to equity conversion exercise.

The analysts noted that Market activities increased in the month of June 2017, compared with May 2017. The volume of stocks traded increased by 7.49% to 10.46bn. Access Bank Plc and FBN Holdings Plc were the two most highly traded stocks in June 2017. The value of stocks traded on The NSE in June 2017 also increased by 7.13% to N110.14bn.

All, the Sectoral Indices rose in June 2017, compared with May 2017 except the NSE Insurance Index, which declined by 0.56%. MoM, The NSE Banking Index recorded the highest appreciation of 11%, with a YTD appreciation of 45.08%. The gain in the NSE Banking Index is mainly attributed to the increase in the share prices of Sterling Bank (38.67%), UBA (16.80%) and Zenith Bank (10.24%). The NSE Industrial Index recorded a MoM gain of 10.96%, with a YTD gain of 21.12%.

Commenting on the outlook for the Month of July, they said “We expect to see some profit-taking in the equity market in July 2017. However, we expect the overall performance of the equity market for July 2017 to be positive, especially if companies report strong Q2 June 2017 results.

The following factors may drive performance: The stability in the macroeconomic environment, Strong Q2 results from quoted companies, improved sentiments towards the Nigerian economy, the sustained liquidity in the foreign exchange market, and Any unexpected possible change in the MPC policy decision. They recommended that investors should maintain a medium-to-long term position in stocks that have good fundamentals.

Investors should also take strategic positions in interim dividend paying stocks. Building materials, food and beverages, agro-allied processing and banking stocks offer attractive returns.”