Business: Investors regain N111bn in stock market in February

Investors’ networth at the Nigerian stock market rose N111 billion in February in contrast to the N1.6 trillion lost in the month of January.

Specifically, the market capitalisation, which represents the total value of shares traded on the Nigerian Stock Exchange (NSE), as at February 26, 2016, closed at N8.336 trillion as against the N8.225 trillion at which it opened for the month.

The All Share Index, another significance performance indicator of the stock market, increased by 312.64 points or 1.31 per cent from 23,916.15 points at which it opened for the month to close at 24,228.79 points last Friday.

Reviewing the NSE classified sectors for the month showed that the Oil & Gas index topped the gainers’ chart with a significant growth of 19.08 per cent increase, while the Industrial Goods, NSE Premium, NSE-30, NSE-ASEM indices added 4.28 per cent, 2.18 per cent, 1.15 per cent, and 0.24 per cent respectively. On the other hand, the Banking Index went down by 4.17 per cent, Insurance decline by 3.88 per cent, Consumer Goods depreciated by 2.26 per cent, and Pension Index shed 2.45 per cent.

Market analysts at the beginning of the month predicted growth which will be driven by investors’ reaction to corporate earnings releases but the number of companies that turn in their result were low and performances were below investors expectation on account of the challenging business environment. For the month under review, the absence of fundamental fiscal and monetary policy directions, coupled with volatility in macroeconomic indices, weakened investors’ sentiment towards equities market and reduced the gains expected for the month.

However, analysts said that the recent news on the increase in international crude oil prices amid sustained decrease in crude oil production in the United States as well as ongoing efforts by OPEC producers and Russia to place a cap on their respective crude oil exports is good news for the Nigerian economy. They also noted that market performance in March will be driven by investors’ reaction to corporate earnings releases.

Also, analysts at Afrinvest Limted said, “With the growing pessimism in the international community on government economic reforms, the need for an economic management team, which has been long due, becomes much more important to drive the implementation of pragmatic solutions to the economic challenges. A carefully selected solution-centred team, coupled with improved government communication of reform objectives and strategies, could restore confidence into the economy.”

- TODAY.NG