MAY 16, 2016
Stock market investors lose N1.2trn in 4 months All Shares Index down 12.5% year-to-date NSE trailing behind major Africa stock markets Stakeholders blame poor market performance on policies By NKIRUKA NNOROM
T
he lackluster performance that pervaded the Nigerian Stock Exchange, NSE, in the last two years has continued in 2016 as investors in the market have lost as much as N1.2 trillion in the first four months of the year (January – April). This automatically leaves the NSE as the worst performing stock exchange among its peers in other African countries.
Available data showed that the NSE has returned negative 12.5 per cent within this period, thereby consolidating the negative performance sustained in the last two years. Opening the year at N9.50 trillion, the market capitalisation of all listed equities slumped by N1.2 trillion, representing -12.5 per cent decline compared to N8.62 trillion posted at the end of April, 2016. Also the All Shares Index, ASI, which opened the year at 28,642.25 points, fell by 3,579.84 basis points to close at 25,062.41 points, again, representing -12.5 per cent year-to-date
return. The NSE had in 2015 retreated by17.4 per cent compared to a decline of 16.14 per cent in 2014. The ASI lost 6014.90 points or 17.4 per cent to close for the year at 28,642.25 on Dec. 31, 2015 from the 34,657.15 it opened for the year, while market capitalisation, which opened for the year at N11.478 trillion in 2015, lost N1.63 trillion to close at N9.850 trillion on Dec 31, 2015. Meanwhile, operators have blamed the declining returns in the nation’s capital market to poorly articulated economic policies by the economic managers. They
averred that getting the economic policies right as well as major improvement in macro-economic environment hold the key to resuscitating and keeping the market on the path of positive growth. They also believe that attracting retail investors back to the market would improve the general performance of the Exchange going forward.
Performance of other major equity markets in Africa (January - April)
Of all the major stock exchanges surveyed by Financial Vanguard, FV, the NSE recorded the worst investors’ return during the first four months to April, 2016. Just like the first quarter of the year where the NSE underperformed all the major exchanges, it continued the trend into the fourth month, coming just closely behind Ghana and Zimbabwe stock exchanges which returned negative 8.3 per cent and 7.9 per cent year-to-date respectively. The NSE outperformed only Mauritius Stock Exchange which recorded -1.6 per cent return. The Egypt Stock Exchange outperformed all the other major exchanges during the four month period, recording 11.0 per cent returns, followed by Tunisia’s Dar es Salaam with 6.2 per cent returns. BVRM and the Johannesburg Stock Exchange, JSE, recorded 4.9 per cent and 4.5 per cent returns respectively, while Nairobi Stock Exchange returned 0.6 per cent to investors.
Constraints for the NSE
COMMISSIONING - Kastina State Governor Aminu Masari (Middle) cutting the tape to commission the Bank of Industry office in Kastina State. With him are, Acting Managing Director, Bank of Industry,(BOI) Waheed Olagunju;(right) and Chief of Staff to the Katsina State Governor, Mallam Bello Mandiyya. C M Y K
David Adonri, Managing Director, Highcap Securities Ltd, attributed the negative RoI to the impact of declining price of crude oil, which severely affected commodities exporting markets, of which Nigeria is one. He fingered lack of policy direction by the new government of Continues on page 18