Published On: Mon, Nov 4th, 2013

Stock market gains N97bn as YtD return reaches 34.50%

Week-on-week (wow), the Nigerian Stock Exchange (NSE) All Share Index (ASI) grew by 0.81 percent last week, while market capitalisation of equities listed on the main board rose by N97billion.

The NSE ASI which opened last week at 37,461.94 points rose to 37,765.82 points at the close of trading last Friday. Likewise, the market cap of companies listed on the Nigerian bourse rose to N12.066trillion from N11.969 trillion the preceding trading week.

Year-to-date (YtD) return of equities market stood at 34.50percent at the close of deals Friday.  Low optimism now trails the stock market especially as the earnings season gradually comes to a close.

Market watchers said they expect global uncertainties to slow down foreign portfolio inflows in November, particularly as the ‘silent period’ and fair valuation of Nigerian equity market douse foreign investor appetite for Nigerian equities.

“Starting the month on a positive note, the Nigerian equity market traded higher today (Friday), with the NSE Index gaining 38bps; will November be a good month for equities? Notably, the NSE Index rallied 2.84percent in October, albeit with bearish outlook on November, as earnings season comes to a close with no catalyst in sight to stimulate investor appetite,” said UBA Capital analysts.

With the year-to-date return at 34.5percent, these analysts noted that “this return performance is broadly in line with our 35percent expectation for the year, thus suggesting that the equity market is at equilibrium. Relatively, the Nigerian equity market is fairly valued at 12.4x P/E and 3.2 percent dividend yield, as this stacks-up with the MSCI Frontier Africa Index valuation of 12.5x and 3.5percent dividend yield.”


By: Iheanyi Nwachukwu

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