NSE records 17.36% loss, as expert advocates caution in 2016

By Chioma Obinagwam

The Nigerian Stock Exchange(NSE), year to date closed in red as its All-Share index, a key measurement indicator recorded a total of 17.36 per cent loss.

According to data gathered by National Daily, the NSE All-Share index slumped from the 34,657.15 basis points it recorded in 2014 to 28,642.25 basis points in the last trading session of 2015.

Similarly, the Exchanges  Market Capitalisation, another major measurement indicator suffered N1.64 trillion loss to settle at N9.85 trillion compared to the N11.49 trillion recorded in 2014.

Analysts opined that despite the negative outing, all the sectors of the Nigerian bourse are good because there is always a high performing stock in every sector.

Charles Fakrogha, the Chief Relationship Officer of Foresight Securities and Investment Limited advised investors to be more cautious in making investment decisions.

“All the sectors are good to invest. I advice investors to look at key parameters like corporate governance profile, the financial performance of the stock, dividend payout etc before asking their brokers to buy the stock,” he advised.

Undoubtedly, the downward trend is not unconnected with the unfavourable macro-economic variables.

Recall that during the year, foreign exchange reserves dipped by 15.61 per cent year-on-year to $29.13 billion by December 29, 2015 from $34.52 billion recorded in the prior year.

Also, the exchange rate tilted northwards against the naira, which saw the currency dipping to as much as N199.10 a United States dollar as at December 31, 2015.

“As you know, investors do not like uncertainties and as we begin to remove the uncertainties around exchange rate, around economic policies, you will see investors being able to appropriately react to the removal of these uncertainties,” the Chief Executive Officer of the NSE, Oscar Onyema said.

Fakrogha, who is also a seasoned analyst said that he is hoping that the numbers look up in 2016, especially if the government is able to maintain stability in the country.

He said: “I expect the capital market to perform better in 2016, which will be possible with government’s assistance. If government the government can maintain stability in the economy there’ll be stability in the capital market.”

Meanwhile, the weekly market report of the NSE showed that the all-share index recorded a gain of 6.59 per cent in the last trading week of 2015, closing at 28,642.25 bps; while market capitalisation also grew 6.62 per cent to close at N9.85 trillion.

Nevertheless, the marginal gain was unable to offset the 17.36 per cent loss recorded in the entire year.

Furthermore, the Exchange recorded a turnover of 2.975 billion shares worth N9.364 billion in 7,174 deals compared to a total of 743.1 million shares valued at N6.59 billion that exchanged hands last week in 8,325 deals.

It affirmed the Financial Services Industry (measured by volume) led the activity chart with 2.76 billion shares valued at N5.17 billion traded in 4,103 deals; thus contributing 93.06 percent and 55.25 percent to the total equity turnover volume and value respectively.

“The Services Industry followed with 66.8 million shares worth N203.04 million in 140 deals. The third place was occupied by the ICT Industry with a turnover of 42.74 million shares worth N21.73 million in 15 deals,” the NSE stated.

At the end of transactions on the last week of the year, trading in top three (equities namely – insurer, African Alliance Insurance Company Plc, lenders Sterling Bank Plc and FBN Holdings Plc. (measured by volume) accounted for 1.2 billion shares worth N2.59 billion in 882 deals, contributing 67.36 per cent and 27.60 percent to the total equity turnover volume and value respectively.

A summary of price changes at the close of the week’s trading shows that 42 equities gained in price during the week, higher than 26 recorded the previous week.

On the contrary, the report says 22 equities dipped in price, lower than 27 reported last week, while 126 equities remained unchanged, lower than 137 equities recorded in the previous week.