Despite the headwinds, the Nigerian equities market at the NGX has remained bullish in the first quarter ended March 31, 2022, BH checks reveal.
Looking at the details, the All share Index had gained 9.1 per cent (3,939.25 points), up from 43,026.23 points recorded on January 4, 2022 to now chalk 46, 965.48 points at the end of the first quarter ended March 31, 2022.
Market capitalization also grew 9.179 per cent or N2.123trillion from N23.183trillion at the beginning of the year to N25.311 trillion on March 31, 2022. This is no mean performance at this turbulent times when the world, Nigeria not an exception is facing one of the most troubling periods.
These challenges range from the effects of Covid-19, insecurity and a weak economy. Others telling challenges include the effects of the raging Russia/ Ukraine war which has further weakened the Naira, and high inflation at 15.7 per cent.
While these have in fact affected equities, some stocks have however shown resilience in the midst of these troubles.
The top ten highest gainers in the first quarter included Cutix Plc which gained 35 per cent from 2.05 kobo on January 4, 2022 to 2.27 kobo a share.
Similarly, Total Energies markets appreciated 11.06 per cent from N238.50 per share on January 4, 2022 to N264.90 per share in March 31, 2022. Red star express inched up 11.1 per cent from 2.70kobo per share early in the year 2022 to close at 3.00kobo per share.
Conoil Plc advanced 11 per cent to N22.25 per share close at N24.70 per share at the end of first quarter 2022, while Berger Paints climbed 10.5 per cent to N6.15 per share to N6.80 per share. Livestock plc surged 10.5 per cent from 1.42 kobo per share to close at 1.57 per share, Cap Plc expanded 10 per cent from N18.00 per share to N19.80 per share; Regency Insurance extended its value by 9.67 per cent to its stock value from 0.31 kobo to 0.34 kobo; and Wema Bank – the only bank that made to the top ten gainers – rose 8.5 per cent from 2.70 kobo to 2.90 kobo.
These equities have proved to be formidable over the last three months and have moved against the odds given the harsh operating environment in Nigeria.
Analysts believe that only stocks with strong fundamentals can push against a strong whirlwind.
BH recalls that the equities market gained 6 per cent at the close of business in December 31, 2021. This is a far cry from the superlative performance of the equities market with a growth of 53 per cent at the close of business in 2020, the notable year of the Covid-19 outbreak.
BH also recalls that it has not been easy for the market to achieve the unprecedented growth that obtained in 2017 when the All share Index hit 74.73 per cent growth. At that period, the market maintained a bullish disposition and investors smiled to the banks.
The major indicators attained unprecedented heights.
The market capitalization peaked at about 13.1trillion and the All share Index gained a giddy height of 66,551.84 basis points on March 5, 2008. Most of the equities grew bullish and the Nigerian Capital Market was thrown into frenzy.
The market became the toast of the Nigerian Business community, with traders, civil servants, farmers and even students making equity investments.
Many analysts note that the Nigerian Stock Exchange, now (NGX) had become a beehive of activities with both investors and speculators scrambling to make a kill. Some individual stocks recorded over 100% appreciation while others edged up by 50% and above.
The exchange has been demutualized and has moved from operating as a not-for-profit, member-owned entity and has become a profit-driven, limited liability company which is accountable to its shareholders.
The Nigerian Stock Exchange (NSE) has joined the league of Johannesburg Stock Exchange and Nairobi Stock Exchange, which are already publicly listed companies. This has resulted in the creation of a new non-operating holding company, the Nigerian Exchange Group PLC (NGX Group) with Mr. Oscar Onyema serving as its Group Chief Executive Officer (GCEO).
Under the demutualization plan of the Nigerian Stock Exchange, a new non-operating holding company, the Nigerian Exchange Group Plc (NGX Group), has been created. The Group has three operating subsidiaries, namely: Nigerian Exchange Limited (NGX Limited), the operating exchange; NGX Regulation Limited (NGX REGCO), the independent regulation company; and NGX Real Estate Limited (NGX RELCO), the real estate company.
Yet this development has not changed the pessimism of those who believe the economic managers and the government are not on the right path.
Going to deeper grounds, recent statistics reveal that the rate of unemployment, the second highest in the world is 33%. At the same time, the underemployment rate stood at 22%; even as inflation, which had hit above 18 per cent last year is still quite high at 15.7 per cent. Nigeria has accumulated a total debt stock of N40trillion which is still growing.
And unfortunately, the more dreadful aspect of it is that the federal government spends 90 per cent of its revenue to service the loans.
Insecurity has not only hobbled agriculture, many parts of the Northern part of Nigeria have been taken over by bandits that not much business activities can subsist.
With the fearful scenario above, the economic trajectory of the country is still uncertain despite growing by 3.4 per cent in 2021.
Coronation analysts said in the last trading session of the week, the domestic bourse reversed all the week’s gains, bringing the All-Share Index down by 0.26% to close at 46,842.86 points, the lowest point since 31 January 2022. Sustained selloffs in Tier-1 banking names, GTCO (-4.02%), FBNH (-1.61%) and ACCESSCORP (-0.51%) continued to weigh on the market’s overall performance. Having gained in two (2) of five (5) trading sessions this week, the ASI closed 0.26% lower w/w, extending losses for the third consecutive week.
It noted that Over the course of the week, Tier-1 banking names were hit the hardest as ZENITHBANK (-16.73% w/w), GTCO (-7.13% w/w), ACCESSCORP (-1.02% w/w) and STANBIC (-1.87% w/w) drove the week’s loss. In addition, NB (-9.10% w/w) and midcap stock, INTBREW (-8.08% w/w) contributed to roil the overall market. Consequently, the year-to-date (YTD) return dipped to 9.66%, while the market capitalization shed ₦57.70bn w/w to close at ₦25.25trn.
Analysis of Friday April 1, 2022 noted that market activities showed trade turnover settled lower relative to the previous session, with the value of transactions declining by 21.77%. A total of 257.33m shares valued at ₦2.86bn were exchanged in 4,586 deals. UBA (+0.00%) led the volume chart with 48.00m units traded, while ZENITHBANK (+0.00%) led the value chart in deals worth ₦541.33m.
Market breadth closed negative at a 3.08-to-1 ratio with declining issues outnumbering advancing ones. REDSTAREX (-10.00%) led thirty-six (36) others on the laggard’s table, while NAHCO (+10.00%) topped eleven (11) others on the gainer’s log.