By Gbenga Agbana

Thursday, 23 Dec 2010

The market capitalisation of the Nigerian Stock Exchange rose by N2.91tn or 58.79 per cent from N4.95tn at the beginning of the year to close at N7.86tn on Wednesday.

Also, the NSE’s All-Share Index, which measures the performance of the stocks listed in the equities segment, recorded an increase of 18.07 per cent over 20,827.17 at the beginning of the year to close at 24,591.58.

Market capitalisation was enhanced by new listings in the equities sector, especially the listing of Dangote Cement Plc, which constitutes over 20 per cent of the NSE’s market capitalisation.

At the end of the first quarter, the ASI and market capitalisation of the Exchange rose by over 34 per cent, thus erasing the losses incurred in 2009. But adjustments in the portfolio of core and high networth investors resulted in the dumping of the shares of some blue chips, which dragged indices down.

Investors and market operators said expectation of the commencement of the full operations of the Asset Management Corporation of Nigeria in 2010, which would buy up the toxic assets of banks and enhance the liquidity in the market, did not materialise.

The development, according to them, did not allow AMCON to have the required positive effect on the stock market.

According to market operators, the optimism that greeted the pronouncement by the Governor of the Central Bank of Nigeria, Mr. Lamido Sanusi, that AMCON would commence operations did not last in the market, because investors believed that the toxic assets of banks should have been bought before now.

The market capitalisation of the Exchange had lost N2.01tn in 2009, due to persistent fall in share prices and investors‘ apathy to investment in the stock market.

The ASI also fell by 38 per cent in 2009 from 31,446.96 points at the beginning of the year to close at 20,827.17 points, while market capitalisation fell from N6.96tn to N4.95tn.

 

Source: Punch