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NSE market capitalisation hits N15tr as investors gain N708 billion

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Market capitalisation of the Nigerian Stock Exchange (NSE) hit the N15tr mark yesterday, as investors jostled for higher capitalised stocks, amid expectation of market rebound.

At the close of trading yesterday, market capitalisation rose by N708b from N14.402tr on Monday to N15. 110tr within a few hours after trading commenced.

Also, volume of shares traded soared significantly, as investors traded 749.468m shares valued at N9.495b in 8, 075 deals. The price movement chart showed that Dangote Cement emerged the highest price gainer with N14.2 or 9.86 per cent to close at N158.20 per unit share.

This was followed by MTN Nigeria’s 3.70 per cent profit to settle at N140 per unit share. Nigeria Breweries, Stanbic and Zenith Bank followed with N3.5 (7.17 per cent), N2 (4.94 per cent) and N1.7 (8.95 per cent) to close at N52.3, N42.5 and N20.7 respectively.

Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion, attributed the rise in indices to the crash in money market rates due to the Monetary Policy Committee’s (MPC) recent decision to lower interest rates to 11.5 per cent.

He said low money market yields and retail investors repositioning ahead of the third quarter (Q3) earnings-reporting season had continued to boost flow of funds to equity assets for the 12th successive sessions.

“The positive sentiments signal a recovery, as traders and investors abandon defensive stocks for growth and dividend-paying equities likely to deliver better returns in the short and long-term.

“This is an impressive performance, indicating that the market is being supported by increased liquidity and buying interests.

“Also, investors and traders are positioning for improved liquidity and positive economic indices, even as inflation peaked at 13.22 per cent worsening the negative returns on other investment windows,” he said.

He explained that investors would be focusing on portfolio adjustment and rebalancing by targeting companies with strong potential to grow their Q3 earnings and dividend on their earnings capacity.

“We expect a pullback at any moment, but buying interests continue to increase amid positioning ahead of Q3 corporate earnings season, despite the negative macroeconomic indices,” he added.

Omordion said the current state of the market offered investors opportunities to position for the short, medium and long-term capital appreciation. He, however, urged investors to target dividend-paying stocks for possible increase in valuation for the rest of the year.


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