By Nkiruka Nnorom
The equities market started off the year (2020) on a positive footing today in consolidation of gains recorded on the last trading day in December as investors gained N13 billion.
The local bourse had on December 31, 2019, risen by 0.87 percent with the benchmark index – All Share Index (ASI) -rising to 26,842.07 points, following investors’ interest in heavyweight stocks.
Specifically, at the close of trading, the ASI moved up to 26,867.79 points, following investors’ interest in MTN Nigeria Communication’s stocks, indicating an increase of 0.10 percent.
Similarly, the equities capitalisation inched up by 0.10 percent to N12.971 trillion, resulting in N13 billion gains in investors’ wealth.
This, however, contradicts analysts expectation, which suggests that the domestic equities market would remain challenged through the year owing to a combination of factors, ranging from weak fiscal reforms to global trade wars.
“We are entering a more challenging investment landscape in 2020. This is because, the combination of a lack of market-friendly reforms locally, a weak sovereign fiscal position, lingering global trade protectionism and weak global growth should result in somewhat turbulent domestic capital markets.
“Our base case for equities posits muted stock market performance for the year, culminating in a replay of the 2014-2016 period wherein the market declined for three consecutive years, losing a cumulative 39.7 percent. Fundamentals are not strong enough to drive a natural correction in the equities market.
“However, recent policy directives from the Central Bank of Nigeria (CBN) might offer some respite to the domestic bourse in the absence of much needed market friendly reforms. Broadly, the themes for the equities market in 2020 remain the same as in 2019, with domestic and external factors as the major drivers,” opined analysts at Cordros Capital.
Meanwhile, sectorial analysis showed that with the exception of the insurance sector, which rose by 0.97 percent, all the other sectors indices closed negative.
Precisely, the oil and gas declined the most, falling by 5.01 percent, followed by the industrial goods sector, which fell by 2.26 percent. The banking and consumer goods sector were also down 0.39 percent and 0.10 percent respectively.
The total volume of trades increased by 2.75 percent to 264.10 million units, valued at N5.23 billion, and exchanged in 3,178 deals. FBN Holdings Plc emerged the most traded stock by volume after trading 60.27 million units, while SEPLAT Petroleum Development Company was the most traded stock by value at N2.37 million.
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