CBN policy propels demand for stocks as indices rise by 0.08 per cent
After eight weeks of persistent downturn, the nation’s equities market closed in upbeat last week, causing both the NSE All-Share Index and market capitalisation to appreciate by 0.08 per cent, ending the week at 26,314.49 points and N12.810 trillion respectively.
The upturn may, however be attributed to the recent policy of the Central Bank of Nigeria (CBN) aimed at redirecting funds into the real sector and stimulate economy growth.
Analysts argued that the directive have significantly softened fixed income yields and triggered buying interest in some stocks with attractive dividend yields.
Last week, all other indices finished higher with the exception of NSE premium, NSE ASeM, NSE Consumer Goods, NSE Oil/Gas and NSE Lotus II Indices, which declined by 0.34 per cent, 0.18 per cent, 5.91 per cent, 0.25 per cent and 2.63 per cent respectively
Reacting on market performance last week, analysts at Codros Capital Limited said: “ln our view, the market is a reflection of investors’ views about the expectations for the economy given the still uninspiring macro story.
“Nonetheless, we expect the market might benefit over the short-term from recent policy directions as investors seek alpha-yielding opportunities in the face of lower yields in the fixed income market.”
Analysts at FSDH Research also said: “The market may remain volatile in the near term. We advise investors to buy quality stocks with a long term investment horizon.”
At the end of transactions last week, a total turnover of 2.063 billion shares worth N18.431 billion were recorded in 16,778 deals by investors on the floor of the exchange in contrast to a total of 1.511 billion units valued at N16.193 billion that was exchanged in 15,544 deals during the preceding week.
The financial services industry (measured by volume) led the activity chart with 1.833 billion shares valued at N12.367 billion traded in 11,116 deals; thus contributing 88.82 per cent to the total equity turnover volume and value respectively.
The industrial goods industry followed with 102.535 million shares worth N2.236 billion in 1,148 deals.
The consumer goods industry ranked third with a turnover of 46.061 million shares worth N1.676 billion in 1,965 deals.
Trading in the top three equities namely, Jaiz Bank Plc, Access Bank Plc and Zenith Bank Plc. (measured by volume) accounted for 1.118 billion shares worth N8.018 billion in 4,492 deals, contributing 54.18 per cent to the total equity turnover volume and value respectively.
Furthermore, a total of 5,624 units valued at N177,580.70 were traded this week in five deals compared with a total of 1,830 units valued at N65,956.10 transacted last week in seven deals.
Also, 34,163 units of Federal government bonds valued at N39.269 million were traded this week in 15 deals compared with a total of 7,465 units valued at N8.165 million transacted last week in 44 deals.
Similarly, 30 equities appreciated in price during the week, lower than 27 equities in the previous week and 28 equities depreciated in price, higher than 18 equities in the previous week, while 108 equities remained unchanged, lower than 121 equities recorded in the preceding week.