Stock Market Recovers N649bn in Two-day Rally
The Nigerian stock market recorded an unexpected rally last week, which led to a recovery of N648.8 billion in market capitalisation in two days . . .
The market appreciated 6.59 per cent while its month-on-month growth stood at 4.59 per cent. End of the year portfolio adjustment by institutional investors and fund managers led to a significant price gains by highly capitalised stocks such as Dangote Cement Plc and Nigerian Breweries Plc among others. As a result, the market capitalisation of equities appreciated by N648.8 billion on Tuesday and Wednesday.
Despite the rally, the market closed 2015 with a decline of 17.36 per cent lower. Specifically, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) closed the year at 28,642.25 points, compared with 34,657.15 as at end-December 2014.
Through the year, the ASI traded within a band of 35,728.12 points and 26,537.36 points, and closed last Thursday at 28,642.25 points with a corresponding market capitalisation of N9.89 trillion. The 2015 performance was in line with expectations, given the current state of the Nigerian economy.
It was another brief trading week as the Federal Government of Nigeria declared Monday, 28th December, 2015 and Friday, 1st January, 2016 as Public Holidays to celebrate Boxing Day and the New Year respectively.
At the close of trades last week, all other Indices finished higher during the week, with the exception of the NSE ASeM Index that closed flat.
The Nigerian equities market had rebounded to close the previous week in the green despite sell pressure in some highly capitalised stocks in the last trading day of the week.
Bull & Bear Markets
The previous week’s performance was boosted by investors drive to take position in some highly discounted stocks for possible future gains.
Meanwhile, analysts at InvestmentOne Limited enjoined investors to tread cautiously and take position in quality name ahead of earning season as the expected December rally is still in abeyance.
“Although consensus view on equities in the immediate is pessimistic, we advise gradual building of positions in quality names for investors with a medium to longer term horizon. We continue to emphasize cautious trades, as the economic situation continues to weigh on market performance, resulting in our negative outlook till year end. In our view, investors with medium to longer-term investment horizons should continue to gradually build positions in quality names,” they said.