SOURCE (abridged): https://punchng.com/stocks-reverse-losses-as-investors-gain-n334bn/

Stocks reverse losses as investors gain N334bn

Published February 11, 2019, Feyisayo Popoola

Stock market investors gained a total N334bn last week as the market closed on a positive note for 5 straight sessions.
Market capitalisation of equities listed on the Nigerian Stock Exchange increased from N11.424tn on Feb 2 to close at N11.758tn on Feb 8. The market earlier plunged to its lowest level in more than one and a half years on Jan 9, as market capitalisation fell below the N11tn mark from N11.72tn on Dec 31, 2018.

Analysts attributed the gains to resurgence of foreign portfolio investors. Vetiva Capital Management Limited, in its weekly market report, said the Nigerian capital market saw an increase in foreign participation since the turn of the year, beating analyst expectations of stand-offish investor sentiment pre-election.

It said the clearest indication of the gains was the resurgence of foreign inflows into the Nigerian market, indicated by a jump in FPI contribution to the importers and exporters foreign exchange window (51 per cent versus 22 per cent in the fourth quarter of last year). Analysts at Vetiva said the positivity could be attributed to both foreign and domestic factors, the change in tone from the United States’ Fed, indicating a slowdown in monetary policy normalisation, and a relatively peaceful pre-election period in Nigeria.

They said, “The equity market has benefitted from the uptrend, with total turnover since start of the year hitting N78bn, driven by renewed interest in large-cap stocks. That said, with the uncertainty of elections still looming large, market performance has remained tepid, with the All Share Index returning only +0.01 per cent year-to-date.”

The equity market traded largely mixed at the start of the year amid bargain hunting and modest negative sentiment, spurred by sustained political uncertainty. According to the analysts, despite mild resurgence in investor appetite for Nigerian equities at end of December 2018, tepid sentiment filtered into the market at the start of January with the ASI losing 6.7 per cent in the first few sessions of the year.

They said, “Nonetheless, investors taking position across key sectors, particularly the industrial goods sector (up 5.8 per cent month-on-month), translated into gains for select value counters and supported a flat return for the ASI. However, due to sizable sell-offs, a few sessions towards the end of January, the broad index however lost 2.8 per cent month-on-month.”