NSE Index Dwarfs S&P, FTSE, Nikkei


By Goddy Egene, 07.20.2010 


Despite the volatility the Nigerian stock market is going through in recent times, the market outperformed leading markets in America, Europe and Asia in the first half of 2010.Information obtained from AfriBiz – an organisation devoted to the promotion of African markets, showed that Nigerian Stock Exchange (NSE) closed the fourth highest mover in Africa but better than what some markets in American, Europe and Asia returned.


Uganda recorded the best growth of 40.7 per cent followed by Kenya with 30.4 per cent and Ghana 27.3 per cent while NSE All-Share Index closed with a growth of 22 per cent. Other African countries that queued behind Nigeria included Morocco (16 per cent); Tunisia (15.4 per cent); BRVM (West Africa – 14.2 per cent); Egypt(5.0 per cent) Zambia (2.2 per cent) and Bostwana(0.5 per cent).JSE Limited, Mauritius, Tanzania and Zimbabwe recorded negative growth of between 1.6 per cent and 8.7 per cent.


Similarly, the Standard and Poor’s 500 Index, which has been widely regarded as the best single gauge of the 500 largest capitalised United States  equities, recorded a negative growth of 1.1 per cent in H1 of 2010.  In Europe,  the Financial Times Stock Exchange'(FTSE) 100 Index, which  represents   the 100 most highly capitalised United Kingdom  companies listed on the London Stock Exchange, fell by  3.7. The Nikkei 225 and Shanghai’s Composite Index fell by 6.0 per cent and 22.1 per cent respectively.


While some of the African markets witnessed declines, analysts cited reasons why African stocks might not decline so much this year.    African financial markets they insist have proven resilient against financial turmoil in the Western world.  “There was no recession in Africa, except in a few countries. Economic growth figures of African countries are very positive and improving. Africa’s low inclusion into the world financial system is a bonus. Also, most African stocks are still undervalued, compared with their emerging markets peers,” they said.


Analysts at AfriBiz added that given the fact that African stock markets have low correlation to Western stock markets, one can assume that shifting from Western stocks to African stocks should be a better idea than moving to cash or treasury bonds. Efforts are being made by the regulators in Nigeria to restore investor confidence in the Nigerian stock market. For instance, the Securities and Exchange Commission (SEC) to strengthen the regulatory framework has issued many rules.






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