Equities rose as Index gained 13.02% in May

Activities in the Nigerian Stock Exchange closed on a positive note on the last trading day of May as major indicator recorded significant appreciation.

This also brought the market closer to the pre-meltdown level of 2008, as investors had recouped over 95 per cent of the 2008 value of shares.

Specifically, the NSE All-Share Index, which opened the month at 33,440.57 basis points, rose by 13.02 per cent or 4,354.18 basis points to 37,794.75 points.

Similarly, the market capitalisation of the listed equities rose by 12.9 per cent or N1.38tn to N12.075tn, up from N10.691tn recorded at the beginning of the month.

This consolidated the appreciation recorded since the beginning of the year as the Year-to-Date gains of the market stood at 34.60 per cent, which is close to the 35.4 per cent appreciation recorded in the equities market throughout last year.

Analysts noted that the market’s performance in May was largely driven by impressive first quarter results by companies and sustained positive investor sentiments. They also attributed the return to strategic position taking by investors ahead of expected impressive second quarter results.

In their report for the week ended Friday, May 31, 2013, analysts from Meristem Nigeria Limited, said the upbeat nature recorded in the market from the beginning of the year was likely to be sustained into the second part of the year.

They noted that numerous opportunities still existed in the market, adding that investors could tap into such opportunities to make increased returns in the coming months.

The analysts said, “We see an opportunity in underpriced stocks with sound fundamentals, which include a great proportion of the penny stocks, which may raise the stock market’s total capitalisation further up.

“With the current pace of economic growth, relatively stable price levels as well as attractive yields, we expect the financial markets’ performances to remain strong. Hence, we see significant potential returns in both the equities and fixed income markets.”

Source: Punch (by Ademola Alawiye)