Nigerian Stock Exchange Attracts N203bn Investment in Two Months.

Trading floor of the Nigerian Stock Exchange

Investors staked N203 billion in shares on the Nigerian bourse in the first two months of  2015 despite the bear run that has hit the market since the beginning of the year.  When the market closed last Friday, showing a year-to-date decline of 13.14 per cent, it had attracted N203 billion invested in 16.985 billion  shares in 181,690 deals in the months of January and February.

However, on  a monthly basis, the amount invested in February declined by 16 per cent compared to January’s performance. Investors staked N92.245.25 billion on 7.735  billion shares in 84,640 deals, down from N110.761 billion invested  in 9.250 billion shares in 97,050 deals in January.

But unlike January when the Nigerian Stock Exchange (NSE) All-Share Index (ASI) dipped by 14.7 per cent in the first month, it appreciated by 1.8 per cent in February.

An analysis of the market performance in February showed that the highest investment was recorded in the second week when investors staked N27.81 billion on 1.950 billion shares in 19,337 deals. The third week followed with N22.467 billion invested in 2.083 billion shares in 20,805 deals. The last week of the month accounted for 21.315 billion staked on 1.657 billion in 21,062 deals.  The first week recorded N20.627 billion invested in 2.027 billion shares in 23,436 deals.

The market suffered high volatility in February with the ASI hitting a record low before recovery in  the last two weeks of the month following  announcements of corporate results and dividends. Nigerian Breweries Plc, Forte Oil Plc and Nestle Nigeria Plc have reported their 2014 financial results declaring dividends as well.

The bear run has led  to a significant decline in the prices of  equities, giving opportunities for investors to enter the market. The Chief Executive Officer of the NSE, Mr. Oscar Onyema, had already   advised investors to take advantage of the low prices of equities and  invest in the market.

He had said despite the market's sharp downturn in 2014, it is not all doom and gloom for 2015.

“Although many anticipate volatility through the first half of the year, some stock prices are at their lowest since the May 2013 sell-off, and some are below book value, thus, presenting domestic investors with no currency risk, an opportunity for cautious long-term investing,” he said.

According to him, “we expect that as the year progresses, underpinned by a successful election with no or low levels of violence, a tighter grip on the security situation in north-eastern Nigeria, and a more certain macroeconomic outlook for oil prices, interest rates and the naira, the market's attractiveness could improve rather significantly. On the fixed income side, government bond yields hovered between 11 per cent and 12.5 per cent throughout 2014, and this will remain an attraction for investors seeking high risk-adjusted returns.”

Onyema had declared that NSE was unwavering in its commitment to solidify its leadership position as Africa's foremost securities exchange, and is committed to initiatives that will position the bourse as an attractive listing and investment destination. THISDAY