It’s 40.11% growth over Q1 performance
BY BAMIDELE FAMOOFO
Both local and foreign investors on the Nigerian Exchange Limited traded N485.4 billion worth of equities in the second quarter of 2022.
This is an increase of 40.11per cent when compared to N346.43 billion traded in the first quarter of 2022.
A data by the bourse noted that the growth in value of equities market traded also reflected in volume as it gained 143.83per cent to 54.27billion in Q2, 2022 from 22.26billion reported in Q1 2022, while deals on the bourse rose by 8.5 per cent to 320,778 in Q2 2022 from 295,533 reported by the NGX for Q1 2022.
The equities market segment of the NGX in 2022 has witnessed positive sentiment trading by investors’ participation in listed fundamental stocks, leading to the market capitalization closing Q2 2022 at N27.94 trillion from N25.31trillion it closed in Q1 2022.
Consequently, the NGX All-Share Index appreciated by 10.3 per cent to 51,817.59 basis points in Q2 2022 from 46,965.48 basis points in Q1 2022.
The data disclosed that the value of Fixed Income traded rose by 38.7 percent to N1.01trillion in Q2 2022 from N728.9billion reported in Q1 2022.
According to the data by the NGX, volume of fixed income traded moved to 972,206.00 in Q2 2022 from 688,564 reported in Q1 2022.
In addition, the market capitalisation of fixed income moved from N21.42 trillion in Q1 2021 to N22.23 trillion in Q2 2022.
The CEO, Wyoming Capital & Partners, Tajudeen Olayinka, noted that improved liquidity in the system in the last six months is responsible for the positive performance of the Nigerian stock market.
Other factors driving liquidity in the equities market he added are: “instant payment of dividends to shareholders through electronic means (e-dividend), provides opportunities for immediate reinvestment of these dividends, especially by institutional investors, who manage funds and portfolios for clients. This did not leave out other traditional investors, who took advantage of low prices, in the run-up to financial year-end rallies that we saw at the beginning of year 2022.
“Improved liquidity in the system in the last six months is responsible for the positive performance of the Nigerian stock market”
“It is also because of the negative real return in the fixed income market and the need to hedge against inflation. Equity market is an inflation adjusting market, and so, some investors who were willing to hedge against inflation, irrespective of the downside risk that the market poses, decided to bring liquidity back to the equity market.
“The ongoing crash in the crypto market brought liquidity back to the equity market. It has been said that more Nigerian investors participate actively in the crypto space, and so, the sudden, though long expected crash in that market, made some affected Nigerian investors cut their losses, for less volatile and recoverable opportunities in the equity market.
“Availability of derivative products is encouraging more institutional investors to embrace the equity market. Investors can now short or long the market at ease. All these activities provide liquidity to the market.”
Weekly performance review
Closing the week, the Lagos bourse extended gains from the previous session, bringing the All-Share Index up by 2bp to close at 51,829.67 points.
The market’s performance was bolstered by investor interests in ZENITHBANK (+0.69%), ACCESSCORP (+1.62) and SEPLAT (+0.04%) offsetting losses in GTCO (-0.24%) and UBA (-0.67%). Consequently, having gained in three (3) of five (5) trading sessions this week, the ASI closed 0.24 percent higher w/w, recovering losses of the past week.
Over the course of the week, the rally in OKOMU OIL (+12.09% w/w), FBNH (+9.95% w/w), ETI (+9.28% w/w) and INTBREW (+5.00% w/w) drove the market into the green region, despite sell offs in MTNN (-0.04% w/w), GTCO (-2.15% w/w), NB (-2.00% w/w),and UBA (-0.67% w/w). As a result, the ASI year-to-date (YTD) return rose to 21.33%, while the market capitalization gained N66.92bn w/w to close at N25.32tn.
Analysis of Friday’s market activities showed trade turnover settled lower relative to the previous session, with the value of transactions decreasing by 55.93 percent. A total of 127.03m shares valued at N1.71bn were exchanged in 3,718 deals. GTCO (-0.24%) led the volume and value chart with 23.47m units in deals worth N480.3m.
Market breadth closed positive at a 1.19-to-1 ratio with advancing issues outnumbering advancing ones. CUTIX (+9.78%) led eighteen (18) others on the leader’s log while COURTVILLE (-7.84%) topped fifteen (15) others on the laggard’s table.
