…as Market Cap Hits N1.4trn in August
According to African markets, a website tracking the
performance of exchanges in Africa, Ghana Stock Exchange (+22.84%) emerged
first while NGX (+19.33%) emerged second on the list, followed by Malawi stock
exchange (+15.79%).
This development has pushed the market to its 15-year high
on the back of strong positive sentiments, as the market capitalisation- listed
value of equities, which opened the trading month of August at N35.011
trillion, closed the month at N36.422 trillion, hence gaining N1.41 trillion.
On the other hand, the All-Share Index (ASI), which is the broad index that
measures the performance of Nigerian stocks, opened the trading month at
64,337.52 index points at the beginning of trading on August 3, 2023, and
closed at 66,548.99 points at the end the month on August 31, gaining 2,211.47
basis points or 3.44%.
The bullish trend can be attributed to investors’ jostling
for low, medium, and high capitalised stocks across some major sectors amid
favourable policies introduced by President Bola Tinubu’s new administration
such as the removal of fuel subsidies, unification of exchange rate, investors
strategically positioning themselves and taking advantage of the recent record
earnings posted by quoted firms and the recent formation of the country’s
economic cabinet and executives. Interestingly, the market traded in mixed
sentiments during the month under review.
Reacting to the performance of the market, market analysts
maintained that most investors, particularly domestic investors are optimistic
that the economy will take shape soon, hence the reason the stock market is
defying current macroeconomic uncertainties.
Cordros Research in their Market review and outlook for
financial markets titled; Veering from the watershed point, stated that the
equities market resilience reflects heightened investor optimism for domestic
growth with the new administration’s promulgation of long-needed policies.
According to the report, the implementation of policy
reforms, accommodative monetary policy and resilient corporate earnings have so
far supported buying activities in August. The report further said that “Even
though foreign investors are expected to stay on the sidelines as long as FX
illiquidity issues persist, its baseline expectation is that the market will
deliver a positive return of 25.8% in the full year of 2023”.
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