Capital gain declines as market capitalisation hits N35trn

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Capital gain declines as market capitalisation hits N35trn

 

Investors’ capital  gain in the Nigeria’s stock market rose 5.5 percent Month-on-Month, MoM, or N1.8 trillion last month as the value of their investment represented by market capitalisation on the Nigerian Stock Exchange Limited, NGX, increased to N35.011 trillion from N33.197 trillion in June 2023.

But the 5.5 percent gain represents a slower growth in investors’ returns compared to the 9.3 percent or N2.8 trillion gain recorded in the preceding month of June.

The July gain was driven by the positive earnings from some companies as well as the reforms in the monetary policy which unified the naira exchange rate, attracting foreign investors into the market.

Also the performance was partly attributed to gains recorded by the blue chip companies across the sub-sectors.

Another stock market gauge, the NGX All Share Index, ASI also recorded significant growth, closing the month yesterday at 64,337.52 points about 5.53 % rise from 60,968.27 points at the end of June 30, 2023.

However Year-to-Date, YtD, return declined to 25.5%    from 26.9% recorded as at end June.

Analysts are of the opinion that increased bargain-hunting activities on the bourse would be seen this month given the prevailing mixed economic data, contractionary monetary policy commitments of the Central Bank of Nigeria, likely positive corporate earnings and possible interim dividend declarations.

Meanwhile, transactions yesterday showed that bears dominated on the bourse as ASI  went down 1.1% to close at 64,337.52 points. This is driven by  selloffs in MTN Nigeria which  lost 3.7%, Dangote Sugar 10.0% and    Ecobank Transtional Incorporated,    ETI,    10.0% .

Performance across the sectors was negative as  four Indices lost, while 2 gained. The Banking and AFR-ICT Indices led the laggards, down 2.6% and 1.9% respectively following selloffs in ETI    which declined by 10.0%, UBA 3.5%    and MTN 3.7%. Conversely, buy interest in Custodian    Investment    led to the rise of Mansard    Insurance by 10.0%, and Conoil 8.6%    to push the Insurance and Oil & Gas Indices higher by 1.4% and 0.6% accordingly.

Reacting on market outlook, analysts at Afrinvest Research stated: “In the next trading session, we expect the bearish performance to persist on the back of weak sentiment and mixed earnings releases.”

 

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