The impressive performance of the Nigerian capital market this year has made analysts to maintain their positive outlook for the market.

The analysts said that in spite of the odds against the market, the equities market was able to turn in significant returns in 2012, with the index gaining significantly, compared to the loss recorded a year ago.

Specifically, the NSE-All-Share Index has so far recorded an increase of 34.42 per cent, compared to a loss of 16.3 per cent recorded at the end of 2011.

Last year, the market capitalisation of the 186 first tier listed equities of the NSE fell by 17.4 per cent, from N7.91tn at the beginning of 2011, to N6.53tn at the end of the last trading day of the year.

This translated into N1.3tn loss for investors during that year, despite impressive second and third quarter results declared by major companies.

Also the NSE’s All-Share Index was also down by 16.3 per cent, from 24,770.52 points in January 2011, to 20,730.63 on the last trading day of 2011.

However, the reverse has been the case this year, as already, the index had gained close to 35 per cent, to 27,866.51 on Friday, a height recorded in 2009.

According to the analysts, last week alone, the market gained 1.9 per cent, despite the fact that trading activities were carried out only three days in the week owing to the Christmas celebration.

Analysts from Vetiva Capital Market Limited noted in their report on Friday, that the reduced trading activities that usually characterised the end of the year were reversed in 2012, as activities remained largely stable.

They said, “The NSE held just three trading sessions, due to the Christmas holidays. Though with thin volume and concentrated gains in a few counters, the market surged by almost 170 per cent last week to compound returns for the Index this year at 34.42 per cent.

“Following this year’s feat, the market benchmark is back to its 2009 levels, sending strong signals of a sustainable recovery. We therefore maintain our views that the search for gains will further put emerging and frontier markets such as Nigeria in the spotlight, with expectation of another good year in 2013. Thus, the NSE should open on a soft positive note with concentration on the financial and consumer goods sector.”

On their part, analysts from Meristem Nigeria Limited noted that the fixed income market in Nigeria recorded increased activities in 2012, stressing that it also held a promising future for the year 2013.

They said, “It was an interesting year for the fixed income market in 2012, as the market experienced impressive performance mostly in the first half of the year.

“The relative attractiveness of FGN bonds in 2013 and its addition to emerging market indices will attract more liquidity and thus, combined with a downward adjustment of the MPR, will drive down the yields.”

Source: Punch (written by Udeme Ekwere)