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NSE Index Rises 1.1% as Equities Market Rebounds

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IMAGE: Trading session in NSE »



Story:  Goddy Egene


The Nigerian equities market recorded an unexpected recovery to close on a bullish note on Monday. This is contrary to expectations that the market may slide further following panic selling that greeted the suspension of the former Governor of the Central Bank of Nigeria (CBN), Sanusi Lamido Sanusi last week.

Sanusi’s suspension spurred panic selling by investors, which led to a fall of  2.81 per cent in the Nigerian Stock Exchange (NSE) Index (ASI) last Thursday and Friday. Given the uncertainty brought by the developments, it was envisaged that the market might slide further.

However, trading opened on the positive note on Monday with the ASI rising 1.07 per cent to close higher at 38,707.14, while market capitalisation added N132 billion to close at N12.433 trillion.

Market operators have said the fall in share prices in the past few weeks offered a buy opportunity for discerning investors to enter the market.

Analysts at Meristem Securities Limited said impressive earnings results would drive favourable reactions from investors and therefore slightly temper the uncertainties in the market.

They said: “The recent bearish mood in the market is also expected to make some of these tickers attractive. Although we expect the share price performance of banking stocks to remain depressed by the monetary policy tightening and recent events relating to the suspension of CBN governor, current prices make the expected dividend yields on these banks ever more attractive at an average of 8.6 per cent. We believe that investors will reward banking stocks with impressive performance with positive sentiments.”

According to them, trading has been largely based on panic and fear resulting from the series of downbeat assessment and not-too-pleasant news flow, both from emerging markets and the domestic space, filtering into the market.

“Little recourse has been made to the fundamentals of the stocks. As on-going news begins to fade out and anticipated corporate actions are priced in, we expect to see a reversal of the current trend,” the analysts added.

At the close of trading on Monday, 28 stocks appreciated led by Dangote Cement Plc with N2.40 to close at N237.40, while 18 stocks depreciated led by Guinness Nigeria Plc with N6.29 to close at N162.61 per share.

Article Credit: ThisDay Newspaper

Updated 5 Years ago

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