April 17, 2018 /09:03 AM/ FBNQuest Research
The Lagos all-share index (NSEASI) far outshone
both Nairobi (NSE 20) and Johannesburg (all-share) in 2017 in local currency
unit terms, and remains ahead ytd this year. It has gained 6.0% on that basis,
compared with 2.4% in Nairobi and a decline of -4.7% in Jo’burg.
Having peaked on 19 January at 17.9% ytd, the
index has since lost much of the sparkle. Daily turnover has averaged US$22.1m
ytd (at the interbank/official rate), which compares with US$6.6m in the
year-earlier period before the opening of the investors’ and exporters window
NAFEX has proved
transformative for the offshore investor. That said, the trend in turnover this
year has been downward: it averaged US$29.3m equivalent in January.
Their share of turnover on
the exchange was around 40% in January and February, yet foreign investors’
transactions brought a net inflow of N23.7bn in both months combined. In the
same period of 2017 and so before the substantive fx reforms, there was a net
outflow of N30.3bn.
We suspect that much of
the good news is already reflected in valuations; the improvement in macro
data, the recovery of oil revenues, the impressive reserves accumulation and
the success of the FGN in twice tapping the Eurobond market.
Further, FGN bond yields
have narrowed by +/- 300bps in the past six months, raising the possibility of
a marked shift in asset allocation by domestic institutions. For now, however,
this remains a possibility.
The chart suggests that
the Ramaphosa bounce in South Africa has come to an end. Nigeria has its own
elections coming: our view is that investors are not worried as long as they
continue to feel that the polls will be decisive, and not followed by violence
and endless judicial challenges.
- Lagos The Star of SSA Stock Markets in 2017
- Equity Market Ready for Another Rally in 2018
Listings and Delistings in 2017
Nigeria Lead as Best Performing Stock Markets in the World in 2017
of the Corporate Governance Rating System (“CGRS”) Steering Board
Portfolio Participation in Equity Trading in 2017
and Foreign Portfolio Participation in Equity Trading – October 2017
- What Stock
Market Investors Must Consider in the 2018 Pre-Election Year
- The Continuing Surge of the NSEASI
- Lagos Now Well Ahead of The Pack