NSE Building

The recent strong performance by the Nigerian equities market, following the decision by the Federal Government to bail out highly indebted stockbrokers, has raised the profile of the market with the Nigerian bourse outshining Kenya in terms of Year-to-Date (YTD) return. 

Analysis by experts at FBN Capital Limited on the YTD performance of the Nigerian Stock Exchange (NSE) and its counterpart in Kenya showed that the NSE was the laggard for most of the year until mid-September, then succumbed to profit-taking and has recovered strongly in the past 10 days to lead its rival by close to eight percentage points in terms of YTD gains.

Their investigation also revealed that offshore investors are driving both markets, “And sentiment has favoured the more liquid frontier exchanges.”

According to the experts, “Nairobi has by far been the more diverse exchange in terms of sectoral composition. It also has a strong sub-regional story to sell: the near-captive market that Kenyan business enjoys across East Africa.

“That said, Nigeria has the higher growth and growth potential. The slowdown has trimmed its GDP growth to about 6.5 per cent y/y but the impact of the global headwinds has been restrained. The banks are the favoured segment in Nigeria, given the Assets Management Corporation of Nigeria (AMCON) effect on the industry and the attractive book values.”

Meanwhile, the rush by investors to take profits after several days of consistent gains impacted the market negatively yesterday, as most market indicators closed in red.

Analysis of trading results released by the NSE showed that the Exchange’s benchmark All-Share Index or ASI depreciated by 193 points or 0.69 per cent to c.ose at 27, 492.89 points from 27, 685.54 points last Friday. Also, the market capitalisation of listed equities declined by N62 billion or 0.70 per cent to close at N8.784 billion from N8.846 billion last Friday.

The banking sector remained the most active in terms of the volume of transactions per sector. It led the equities sector with a total of 169.79 million ordinary shares valued at N2.18 billion made in 1,804 deals.

The volume of shares sold in the banking sector was largely driven by the activity in the shares of Zenith Bank Plc, United Bank for Africa Plc, Guaranty Trust Bank Plc and Fidelity Bank Plc.

http://www.thisdaylive.com/articles/ytd-gains-nigerian-stock-market-leap-frogs-kenya-others/133894/