Activities on the Nigerian Stock Exchange have continued to record some significant improvement in the last one month, underscoring rising investor appetite that seemed to have been on the increase.
This is in sharp contrast to what obtains in some other global and more developed markets, which have continued on a downward trend despite concerted efforts by the relevant authorities to jerk up activities.
For instance, last week alone, the equities market recorded significant appreciation, with the NSE’s All-Share Index recording an increase of 2.8 per cent or 630.15 basis points from 22,110.91 points last Friday, to 22,741.06 points.
In the same period, the market capitalisation of the listed equities rose by N202bn or 2.9 per cent to close last Friday, at N7.260tn, up from N7.059tn recorded a week earlier.
The NSE-30 Index, which measures the performance of the top 30 shares also rose by 2.3 per cent or 23.43 basis points from 1,030.77 basis points the preceding week, to 1,054.20 points last Friday.
On the global scene, however, pessimism has continued to rule the wave, as details of the United States Federal Reserve meeting revealed no near-term plans of stimulus measures.
Global shares fell by more than one per cent on Thursday on concerns about the world economic growth outlook and dimmed expectations for any new near-term stimulus response by the United States Federal Reserve.
Stocks on Wall Street tumbled after the opening bell with the weakening growth picture prompting a number of high-profile corporate earnings warnings in recent days.
The weaker-than-expected start to the second-quarter US corporate reporting season, combined with expectations of slower economic growth in the world’s leading economies, had encouraged hopes for the Fed to resume a policy of creating money to lower long-term interest rates, a process known as quantitative easing, or QE3.
Analysts from Vetiva Capital Management Limited, in their report on Friday, noted that the banking stocks were driving major activities in the Nigerian equities market.
They said, “Mirroring the performance of the previous week, the Index trended further north, rising significantly as the release of the second quarter results of selected banks scorecards enlivened the market, spurring broad activity in Financials.
“Appreciable upswings in the Consumer and Industrial Goods sectors, lent further support to this week’s performance. The results reiterate our view that 2012 will be the year of the banks. “
The analysts noted that it is likely that activities would continue on an upbeat note this week, although profit-taking may exist on the back of strong appreciation in the last few weeks.
“On the home front, given the strength of gains in the week past, we think investors might be tempted to take profits in the week ahead. Nonetheless, we expect further positive banking results to sustain the bullish trend,†they noted.
Source: Punch/Udeme Ekwere