Fuel price deregulation, others provoke swing trading in stock market
Gains N0.328 trillion in three days
The recent announcement by the Federal Government of an increase in the price of petrol from N86.50 to N145 has provoked swing trading in the equities market leading to a bull market rally since Thursday last week.
This has led to an appreciation in market capitalization to the tune of N… in four days, and All-Share Index climbing up with … basic points to settle at … yesterday, Tuesday, May 17, 2016.
The upswing, which started since Thursday last week, has boosted share prices of some of the listed oil companies, resulting in the growth of market indices.
Market analysts linked the positive sentiments in particularly oil and gas sector stocks to hike in petrol price.
They observed that many of the companies in that sector were into distribution and marketing of petroleum products, stressing that investors, who expect that the oil firms would make higher profit margin as a result of the petrol price increase embarked on swing trading of the affected stocks.
Swing trading, according to Wikipedia.org, is a style of trading that attempts to capture gains in a stock within a short period.
Speaking on the development, the Doyen of stockbrokers in the Nigerian Capital market, Mr. Ndata said the bull market rally is induced by the petrol price increase and other positive information coming out from government quarters about what they intend to do to boost economic activities.
He declared: “What is responsible is the current information about the economy and the government’s position on the economy. You know the market is sensitive to information. The information about the petrol price increase and you know that most of the affected companies are listed on the Stock Exchange. In addition to this, the Nigerian Stock Exchange has also embarked on measures to enhance the market performance to shore up investor confidence in the market.”
On Thursday, May 12, Market Capitalisation was N8.900 trillion, and All-Share Index, 25,865.06. This went up on Friday, May 13, to N9.098 trillion, and 26,441.03 respectively.
No Comments yet