The Nigerian stocks market, at the end of the first quarter of 2018, experienced relatively impressive Return on Investment (RoI) as investors recorded gains. Meanwhile, despite its slide in recent weeks, the composite NSE All Share Index for the first quarter of the year still gained 3,261.32 points or 8.53 per cent to close at 41,504.51 points from the opening level of 38,243.19 points in December 29, 2017. Investors traded a huge volume of 42.87 billion shares from previous quarter’s 23.26 billion shares traded. Within the period however, the market index touched a high of 45,321.82 basis points and a 37,646.88 low to reveal the high level of volatility within the period. Similarly, market capitalisation for the period was up by N1.384 trillion to close higher at N14.993 trillion, from an opening value of N13.609 trillion. Market capitalisation for the period was supported by the listing of additional shares of some companies at the end of their recent concluded right issues. The new listings made the effects of the price adjustments for dividend declared recently on the market capitalisation to pale into insignificance. The better-than-expected corporate earnings released, especially towards the end of the quarter did not impact equity prices and market fundamentals, as there seemed more negative sentiment than positive reactions to the companies reported impressive numbers that had supported higher yields before now despite the relative high valuations in the market. It is however, good to mention that the continued intervention by the Central Bank of Nigeria (CBN) in the interbank segment of the foreign exchange market has supported the naira’s stability against major currencies and driving national output. This has closed the gap between the interbank and black-market rates, stabilizing prices and controlling imported inflation, just as consumer price index fell for the 13th consecutive months to 14.33 per cent in February, to reflect the impact of monetary authority in its bid to ensure price stability and drive economic growth and development. Sectoral analysis showed that most investors in Nigerian equities ended Q1 with positive returns. Investors in industrial goods and banking stocks were ahead of other investors. The NSE Industrial Goods Index recorded the highest quarter-on-quarter return of 10.96 per cent. The NSE Banking Index followed with a return of 9.49 per cent. The NSE Insurance Index rallied average gain of 8.41 per cent. The NSE Oil and Gas Index appreciated by 4.90 per cent while the NSE Consumer Goods Index posted a modest return of 0.21 per cent. The NSE 30 Index, which tracks the 30 most capitalised companies at the stock market, posted a three-month return of 7.30 per cent. Stocks market analysts attributed the market performance to the stellar performance by the industrial goods and banking sectors, saying that both sectors rode on the back of regulatory protection by the government and their primary regulators to deliver the performance. They noted that the market would have done better given a clear cut policy in certain areas of the economy, saying that the overall performance of the market was impressive. They averred that the inability of the Monetary Policy Committee (MPC) members to sit due to non-constitution of the committee slowed activity in the market. The chief operating officer of InvestData Limited, Mr. Ambrose Omordion said that the nation’s equity market on quarterly basis had continued to look up despite the recent technical correction that had shakeout many investors and traders out of position to slow down market momentum. Omordion added that as the quarter under review was up, but on a mixed sentiments, resulting from the positive macro-economic data, stronger corporate earnings and growing consumer confidence in the midst socio-political instability, rising debt profile of the nation and unclear economic reforms of the government. Chief operating officer and stockbroker with Foresight Securities and Investment Management, Mr. Charles Fakrogha also adjudged the market performance for the quarter good, saying that the fact that the MPC did not meet during the quarter did not have any material impact on the market. He said, “in January, we saw a lot of activities in the market; we saw so much returns. Of course, at a point, the Nigerian equities market was adjudged one of the best performing in the world and that tempo was due to the positive ratings by some international rating agencies and that tempo continued for quite some time. It was also sustained as a result of the earning reports of the companies that hit the market. “Overall, I will say the first quarter has done well, activity has been very good. The market does not operate in isolation, it reflects the larger economy. What you see in the market is basically a reflection of happening in the Nigeria economy. However, towards the end of February and March, we saw a reverse of the situation.” Stocks market performance for April, Omordion said in the Nigerian stocks market, the month of April is the peak period of quarterly earnings season which suggests that traders should be in the market before the quarterly numbers start rolling in. According to him, more quarterly and few full year earnings would be released. Earnings from blue-chip companies may strengthen market fundamentals, if positive. He also said the first MPC meeting in 2018 will give direction expected to boost the recovery so far as the market and analysts are expecting rate cut as inflation is heading to one digit number and make cost of borrowing cheaper, saying that the market will see more volatility as selling down may continue if the political environment start becoming tens. He noted that “we will see a more vibrant market as a result of market players positioning for second quarter, even as we expect liquidity to improve.” Stocks market analysts noted that from the foregoing, the current bullish trend of the Nigerian equities market will depend on many global, domestic, regulatory and industrial factors. “On the global scene, possibility of low oil prices due to renewed investments in shale oil exploration and production and stronger dollar may result in capital reversal from Nigeria and other emerging market economies. This will affect the Nigerian capital market negatively. “In the domestic front, favourable macroeconomic conditions, timely implementation of the Economic Recovery and Growth Plan and judicious execution of the 2018 budget would help accelerate growth and restore confidence in the economy. The sustenance of the current foreign exchange intervention regime, relatively stable oil prices and restoration of security in the Niger Delta region will be critical in ensuring the equities market maintains the current momentum. “Regulatory efforts of developing the capital market and protecting investors by the NSE and Securities and Exchange Commission (SEC) coupled with a favourable business environment that yield higher corporate results are equally key for the growth of the market.”


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