Market capitalisation improves as investor optimism grows

The equities segment of the Nigerian Stock Exchange witnessed strong bargain on Monday, leading all market indicators to close on a positive note.

The market capitalisation of the listed equities rose by N186bn or 1.83 per cent from N10.148tn to N10.334tn on the back of gains by 34 stocks, compared to the 0.4 per cent or N40bn appreciation it recorded on Friday.

Similarly, the NSE All-Share Index rose by 1.83 per cent, or 541.12 basis points, from 29,511.08 basis points to 30,052.20 basis points.

Data from the NSE showed that the Premium Board Index was up by 3.14 per cent to 1,633.92 basis point; the NSE Main-Board Index rose by 1.13 per cent to 1,417.37 basis points, while the NSE 30 Index rose by 1.86 per cent to 1,350.68 basis points.

Also, the NSE Pensions Index was up by 2.33 per cent to 942.25 basis points, while the NSE Lotus Islamic Index and the NSE Alternative Securities Market Index rose edged up by 0.78 per cent and 0.02 per cent to 2,010.94 and 1,208.14 basis points, respectively.

A review of the sectoral indices showed that the NSE Banking Index, which rose by 3.19 per cent to 319.55 basis points, outperformed its peers.

It was followed by the NSE Insurance Index and the NSE Industrial Index, which appreciated by 1.62 per cent and 1.4 per cent to close at 135.39 basis points and 2,143.17 basis points.

The NSE Consumer Goods Index rose by 0.33 per cent to 733.93 basis points, while the NSE Oil and Gas Index inched higher by 0.17 basis points.

United Bank for Africa Plc led the gainers, rising by 10.24 per cent or 39 kobo to close at N420 per share.

United Capital Plc rose by 9.09 per cent or 12 kobo to close at N1.44 per share, while FBN Holdings Plc gained 5.99 per cent or 39 kobo to close at N6.90 per share.

Also among the gainers were Flour Mills of Nigeria Plc and Axa Mansard Insurance Plc. Flour Mills was up by five per cent or N1.10 to close at N23.10 per share, while Axa Mansard gained 4.98 per cent or 12 kobo to close at N2.53 per share.

Caverton Offshore Support Group Plc led the losers, shedding 9.50 per cent or 34 kobo to close at N3.24 per share.

Eterna Plc and Honeywell Flour Mills Plc declined by five per cent each to close at N1.71 and N2.47 per share, while UAC Property Development Company Plc fell by 4.98 per cent or 41 kobo to close at N7.83 per share.

Analysts at Meristem Securities Limited had expressed reservations about whether the bullish trend, which saw the NSE ASI and market capitalisation rise by 2.42 per cent last week, would be sustained this week.

In their investment guide for the week, they said, “While we expect investors to react to news flows to the market, we are not optimistic that the bullish trend will be sustained in the coming week, as we anticipate that profit-taking activities will dictate the market’s direction.”

According to analysts, recent gains in the equities market can be attributed to growing confidence in the global market, low valuation of stocks and signs that President Mohammadu Buhari is set to fully constitute his administration and give a clearer picture of the economic policies his government will pursue.