TRADING activities on the floor of the Nigerian Stock Exchange, NSE All-Share Index, ASI and market capitalisation on Friday ended the week on a bearish note dipping 1.88 percent and 1.44 percent to close at 33,664.91 and N11.491 trillion respectively.
Similarly, four (4) indices finished lower during the week, while NSE Consumer Goods, NSE Lotus II, NSE Industrial Goods Indices closed higher by 0.08 percent, 0.37 percent, and 0.16 percent respectively. However, the NSE ASeM index closed flat, according to the NSE weekly stock market report for June 5, 2015.
Analyst said despite the bullish session on Friday with a 0.95 percent gain, the NSE ASI depreciating by 1.88 percent is the worst week-on-week, w/w performance since the week ended 13 April-when the benchmark index dropped 2.23 percent. “Following this week’s decline, the Year-to-Date loss expanded to 2.86 percent as investor appetite remains low,” analyst affirmed.
A turnover of 1.221 billion shares worth N16.964 billion in 19,847 deals were traded this week by investors on the floor of The Exchange in contrast to a total of 1.799 billion shares valued at N22.105 billion that exchanged hands last week in 17,337 deals.
The NSE weekly stock market report say the Financial Services Industry (measured by volume) led the activity chart with 935.233 million shares valued at N9.258 billion traded in 11,066 deals; thus contributing 76.58 percent and 54.58 percent to the total equity turnover volume and value respectively.
According to the report, the Consumer Goods Industry followed with a turnover of 77.298 million shares worth N5.048 billion in 3,144 deals. The third place was occupied by the Conglomerates Industry with 47.348 million shares worth N228.761 million in 1,182 deals.
The NSE further affirmed that trading in the shares of lenders, Zenith International Bank Plc, Diamond Bank Plc and United Bank for Africa Plc., (measured by volume) accounted for 357.004 million shares worth N4.033 billion in 3,021 deals, contributing 29.23 percent and 23.77 percent to the total equity turnover volume and value respectively.
A summary of price changes on the Nigerian bourse shows that 27 equities appreciated in price during the week, lower than 38 of the past week. On the contrary, 47 equities dipped in price, 31 of the previous week, while 119 equities remained unchanged, lower than 124 recorded in the preceding week.
For capital market to thrive government needs to create enabling environment for foreign and domestic investors to operate. Government must come out with policy that will allow economy to grow as expected by its citizens.
In order to ensure that Nigeria’s economy is in good shape under the new administration of President Muhammadu Buhari and beyond, capital market operators believe that government must come out with policies that will have positive impact on economy.
Capital market operators on their part called on the new government to address the infrastructure gaps in the economy by using the capital market instruments.
The coalition of capital market operators which comprises of Mr. Emeka Madubuike, Chairman, Association of Stockbroking Houses of Nigeria, ASHON, and Mr. Victor Ogiemwonyi, Chairman, Association of Issuing Houses of Nigeria, AIHN, said, “At present, the Nigerian capital market is underutilized relative to its absorptive capacity. Therefore, the new administration of president Buhari’s goal of diversification of the economy would be reinforced if the capital market is deepened to enable it fund the capital expenditure over the short term to medium term period”.
They said, “The core capital market operators should work with the regulators to come with pragmatic timetable which will be endorsed by the Federal Government for the commencement of viable commodity exchanges which are either privately owned or government owned.”
They believed that government borrowing rate in the capital market should drop to avoid crowding out of funds in the capital market so as to make the market attractive for private sector to raise funds.
Financial analysts stressed that only a strong policy and sincere implementation from President Muhammadu Buhari can sustain investors’ confidence in the Nigerian capital market.
Analysts at NASD Over-The-Counter, OTC said it looks forward to some change in areas that will create new vibrancy in the economy.
They said: “We expect a change in the perception of Nigeria as a difficult place to do business (current World Bank ranking puts Nigeria at 170th out of 189 on the ease of doing business chart). A positive change in this direction will encourage confidence in the economy, an inflow of critically needed long term investments and increased Private equity activity”.
The institution expects to see more activity on the secondary side of the private equity industry in future.
“On power generation and distribution, we expect the new government to focus on creating a level playing field for power generation and in turn the development of a self-sustaining industry. A first step in this direction is making capital available to the brave entrepreneurs in the industry. NASD is positioned to assist companies; particularly those in the power sector raise capital in order to meet their overarching objectives. On significant public accountability and integrity in governance: we expect this will boost trust in Nigeria’s policy making process and encourage better reporting and accountability even in the private sector”.
Speaking on what government should do to sustain the positive run, the Managing Director and Chief Executive Officer of APT Securities and Funds Limited, Mallam Kasimu Kurfi, said the president would need to formulate a “strong policy” on the capital market and then follow it up with honest implementation to sustain the confidence investors have reposed in him.
Kurfi said the market’s positive performance was because the uncertainties surrounding the elections, which made several investors to exit the market and caused others to trade cautiously, had been removed.
“Investors don’t like uncertainties; they like good news. Now that those uncertainties are over, the good news is here. Buhari’s victory is good for the market,” he said.
Kurfi noted that investors and analysts are still waiting for the president’s policy statement, saying it would guide them to take investment decisions.
He believed that if Buhari comes up with a policy deemed favourable by both foreign and domestic investors, the move would galvanise the market particularly and the economy generally. The stockbroker urged the new government to reduce the level of corruption so that government can have enough to invest on infrastructure.
More so, analysts at United Capital Plc believed that the equities market still reflects weak sentiment driven by uncertainties trailing the economy and financial markets.
The investment analysts expect cautious and speculative trading to guide market performance this week.
According to them, “a lucid direction of the economy and financial markets via policy statement and key appointments by the new government will be a game changer for the market.”


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