NCM 2020: Markets Were Volatile Globally in Year 2020 as COVID-19 Pandemic Induced Uncertainty

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Saturday, January 30, 2021   /06:00 AM / By Proshare Research/ Header Image Credit: EcoGraphics


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Equities Market Review

Markets all over the world were volatile during the year as the coronavirus pandemic caused high levels of uncertainty, the emergence of new gainers, and losers in markets. Despite the effect of the coronavirus on some economies, their market performance was positive during the year. Some gains recorded in markets could be attributed to investor's confidence in the positive outlook of the economy given the government's actions to stimulate a quick rebound in the economy. Conversely, some markets closed in the red in 2020 despite actions by the government to stimulate investors' confidence in the market.

 

Furthermore, technology stocks gained prominence in most countries in the year 2020. This was supported by the need to maintain social distance, and work from home to halt the spread of the virus e.g., some technology stock share price like Zoom, Tesla, Amazon, and so on, increased in 2020. On the other hand, in some countries the improvement in the stock market could be attributed to government policy e.g., in Nigeria, the CBN's reduction in its monetary policy rate to 11.5% increased liquidity in the economy and these led to investors flocking the capital market with limited investment options available to them.

 

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Global Market Review

The Majority of the Global stock markets tracked by Proshare closed the year positive amidst the coronavirus pandemic. In the year under review, amongst the Thirty-three (33) stock markets that were reviewed, (19) were in green which signifies an improvement, (5) stock markets did not record any change while (9) stock markets were in red which indicates losses. Nigeria's All Share Index topped the list with a +45.07% gain followed by USA Nasdaq and South Korea's KS11 with +43.22% and +32.01% gains, respectively. Conversely, Austria's ATX, FTSE 100, and Singapore's STI dipped by -12.68%, -12.49%, and -11.39% respectively to top the list of markets in the red. The Nigerian Stock Market, which is our primary monitoring market, the key benchmark index, NSE ASI, YTD was the best performing stock market with gains of +45.07%.

 

Table 1: Global Market Review

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Gainers

Nasdaq    +43.22%

  • Nasdaq recorded a YTD performance of +43.22% in 2020 which is the fifth-best year in its history. The performance of the Nasdaq was very impressive given the surge in the interest of investors in Technology stocks.
  • The coronavirus pandemic caused a major drift of investors' interest in technology stocks.
  • Companies such as Amazon, Facebook, Apple recorded an increase in their profits and share prices despite the effect of the pandemic on the economy.

KOSPI     +32.01

  • Despite the ravishing effect of the coronavirus pandemic on the South Korean economy, its stock market recorded positive gains at the end of the year.
  • The South Korea stock market ended the year with 2,873.47 points, which is +32.01% higher than 2,176.67 points recorded as of 31st December 2019.
  • The YTD increase in the performance of the KOSPI could be attributed to gains in financial shares, technology stocks, and industrials.
  • The major driver for the boom in South Korea's stock market was attributed to the actions of retail investors that flocked to growth and value stocks.
  • Retail investors were truculent in taking the risk on stocks, flocking the stock market to pick up equities ditched by foreign and institutional investors.

 

Taiwan (The Taiwan Weighted Index) +21.38%

  • The pandemic caused panic and sharp fluctuation of the Taiwan Stock Exchange (TWSE), as the stock market recorded a low of 8,523.63 points in March.
  • The Taiwan Stock Exchange closed the year with 14,687.7 points, +21.38% higher than 12,100.48 points recorded as of 31st December 2019.
  • Taiwanese government stimulus incentives and National Stabilization Fund helped trigger the gain in the momentum of the weighted index in 2020.
  • The major driver of Taiwan's bullish domestic market was the increase in the share price of the world's No.1 contract chipmaker known as Taiwan Semiconductor Manufacturing Co. (TSMC).
  • Some market analysts have predicted that the domestic market could break a new high of 15,000 points in the first half of 2021.

SSE 180 Index (Shanghai) +16.75

  • SSE 180 Index tracks the daily price performance of the 180 most representative A-share stocks listed on the Shanghai Stock Exchange.
  • SSE 180 index ended the year on a positive note, as it recorded positive gains of +16.75%. Its index point closed the year with 10,476.12 points as of December 29th, 2021 an increase from 8,972.92 points recorded on December 31st, 2019.
  • The positive performance of the SSE 180 index could be attributed to the quick rebound of economic growth in the Chinese economy.
  • The quick rebound of the Chinese economy helped fuel the expectations that blue-chip companies would record profits. Hence, investors flocked to blue-chip stocks on the SSE 180 index.

Nikkei 225   +16.01%

  • The Nikkei 225 is a stock market index for the Tokyo Stock Exchange. The Nikkei measures the performance of 225 large, publicly owned companies in Japan from a wide array of industry sectors.
  • The Nikkei 225 ended the year 2020 with an index point of 27,444.17, a YTD increase of +16.01%.
  • The impressive performance of the Nikkei 225 was attributed to the positive investor sentiment given the dovish monetary policies from central banks in Japan, the US, and Europe, as well as a string of positive vaccine news.

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Losers

Austria ATX -12.68%

  • The Austrian Traded Index (ATX) is the leading index of Wiener Börse which tracks the price trends of the blue chips on Winer Borse.
  • ATX closed the year with 2,792.93 index points. It recorded a YTD decline in index points of -12.68%.
  • The decline in the ATX index could be attributed to negative investor sentiment that played out during the year.
  • The coronavirus pandemic affected productive activities in the Austrian economy, as the Austrian economy contracted by -6.4% in Q2 2020 and -3.80% in Q3 2020.
  • The pessimistic outlook of the Austrian economy affected investors' confidence in companies listed on the bourse.

FTSE 100 -12.49%

  • FTSE 100 closed the year on a negative note. It ended the year with 6,600 index points, as it recorded a YTD decline in index points by -12.49%.
  • A major reason attributed to the decline in the FTSE 100 is heightened worries over an extended period of lockdowns which increased uncertainty about the Britain economy.
  • Furthermore, the government's Brexit deal did not allay fears of a potential breakdown at the border.
  • Also, it remains fuzzy on how the services sector will be affected as the deal underestimates the importance of the services sector which makes up about 80% of the UK economy.

Straits Times (STI) -11.39%

  • Straits Times (STI) closed the year in the red. It ended the year with 2,869.22 index points, as it recorded a YTD decline in index points by -11.39%.
  • The STI was a rollercoaster throughout the year as it recorded over 3,000 index points at the beginning of the year.
  • The decline in the STI could also be attributed to the negative perception and uncertainty about the outlook of the Singaporean economy.
  • Singapore's economy dipped by -3.8% in Q4 2020 while on an annual basis it contracted by -5.8%.

MerVal    -7.87%

  • Unlike in the previous year when the Argentine bourse ended the year with a YTD increase of +37.60%, the narrative for 2020 was different.
  • The Argentina MerVal ended the year 2020 on a negative note. It ended the year with 38,390.84 index points, as it recorded a YTD decline in index points by -7.87%.
  • Argentina's weak economy which was further exacerbated by the advent of the COVID-19 pandemic led to negative investor sentiment.

Belgium (BEL-20)   -7.42%

  • The BEL20 is the benchmark stock market index of Euronext Brussels.
  • It tracks the performance of the 20 most capitalized and liquid stocks traded in Belgium. It is a modified capitalization-weighted index.
  • It ended the year with 3,662.28 index points, recording a YTD decline in index points by -7.42%.
  • The Argentine economy is currently battling with sovereign default, sliding reserves, double-digit inflation (35.8% as of November 2020), and a currency crisis.

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Africa Market Review

There was a decline in the performance of the African Stock market in 2020 when compared with the previous year. Amongst the thirty-six (36) African stock markets reviewed, (11) were in green signifying an improvement, one (1) remained unchanged, while (23) were in red signifying a dip. The EGX 70 EWI topped the list with a gain of +289.68% while Zimbabwe's ASI and Egypt EGX 100 EWI were second and third with gains of +220.91%, and +115.90% respectively. The three top losers were Kenya's 20 Share Index, Mauritius SEM-10, and Uganda's All Share Index with losses of -30.72%, -28.30%, and -28.07% respectively.


Table 2: Africa Market Review

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Gainers

Egypt EGX 70 EWI   +289.68%

  • The Egyptian Exchange launched an equally weighted index EGX70EWI on 02 February 2020. The Index includes the top 70 companies in terms of Liquidity and activity after excluding the constituents of EGX30.
  • EGX70EWI avoids concentration on one industry therefore has a good representation of various industries/sectors in the economy.
  • Zimbabwe EGX 70 EWI recorded a significant improvement in 2020. The EGX 70 EWI ended the year with 2,082.72 index points, as it recorded a YTD increase in index points by +289.68%.

Zimbabwe All Share Index +220.91%

  • Zimbabwe All-Share Index, the main index of the financial market grew by +220.91% YTD.  Its index point increased to 2,459.23 basis points as of the end of the year.
  • Zimbabwe's performance is surprising given the present economic woes betiding the country. Its growth rate has been slow and economic pressures further exacerbated its growth rate while its inflation rate as of November 2020 stood at 401.66%.
  • The growth in the Zimbabwe All Share Index could be attributed to the devaluation of the local currency which prompted investors to inject money into listed companies.

 

Rwanda RSI ASI   +19.95%

  • Despite the contraction in Rwanda's GDP in Q3 2020 by -3.6%, investors' confidence in the rebound on the Rwandan economy fuelled positive investor sentiment in the financial market.
  • Rwanda RSI ASI index increased by +19.95% YTD in 2020.  Its index points increased to 148.02 points as of the end of the year 2020.

 

Losers

Kenya 20 SHARE INDEX   -30.72%

  • The Nairobi Securities Exchange 20 Share Index NSE20 is a major stock market index that tracks the performance of 20 best performing companies listed on the Nairobi Securities Exchange.
  • The companies are selected based on weighted market performance for 12 months, market capitalization, number of shares traded, number of deals, and turnover.
  • Kenya's "20 share index" recorded the highest decline amongst the African markets tracked by Proshare.
  • It declined by -s30.72% YTD in 2020. Its index points at the end of the year declined to 1,838.84 index points.

Mauritius SEM-10    -28.3%

  • The SEM-10 consists of the 10 largest companies by market value.
  • SEM-10 recorded the 2nd highest decline amongst the African markets tracked by Proshare.
  • It declined by -28.3% YTD in 2020, as its index points at the end of the year declined to 308.2 index points.

Uganda All-Share Index -28.07%

  • Uganda All Share Index (ALSI) is the benchmark index for the Ugandan equity market.
  • It tracks the performance of 16 listed security equities, of which half are local companies and the other half are cross-listed Kenyan companies.
  • It declined by -28.3% YTD in 2020. Its index points at the end of the year declined to 308.2 points. 

 

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Downloadable PDF - The 2020 Nigerian Capital Market Report

1.       Complete Report: The Nigerian Capital Market Report 2020: Leveraging a Crisis - Jan 28, 2021

2.       Executive SummaryThe Nigerian Capital Market Report 2020: Leveraging a Crisis - Jan 28, 2021


 Related Links

1.      NCM 2020: Technology and the Nigerian Capital Market      

2.       NCM 2020: Regulatory Governance in 2020

3.       NCM 2020: Energy Commodities Took a Big Hit in 2020

4.       NCM 2020: Bond Funds Grew By 443.80% YoY in 2020

5.       NCM 2020: Lower FX Earnings Widened the Gap Between Two Markets

6.       NCM 2020: FGN Eurobond Was Driven by Movement in Oil Prices and COVID-19 Pandemic

7.       NCM 2020: Treasury Bills Fell to a Record Lows in 2020

8.       NCM 2020: Yields in the Fixed Income Market Took a Downward Trajectory in 2020

9.       NCM 2020: Top Ten Moments in the Nigerian Capital Market in 2020

10.  NCM 2020: NASD USI Closed Green in 8 Out of 12 Months in 2020

11.  NCM 2020: Extracts of Financials of Quoted companies - DANGCEM Tops on Revenue and PAT

12.  NCM 2020: Agriculture Sector - OKOMUOIL Tops on EPS and PAT Margin

13.  NCM 2020: Healthcare Sector - NEIMETH Tops on ROE and PAT Margin

14.  NCM 2020: Industrial Goods Sector - DANGCEM Tops on EPS as BUACEMENT Tops on PE Ratio

15.  NCM 2020: Oil and Gas Sector - TOTAL Tops on PE Ratio as JAPAULOIL Tops on PAT Margin

16.  NCM 2020: Consumer Goods Sector - NESTLE Tops on EPS as DANGSUGAR Tops on PAT Margin

17.  NCM 2020: Financial Services Sector - NESF and STANBIC Top on EPS

18.  NCM 2020: Sectoral Market Capitalisations: Oil and Gas Records - 20.62% Decline in 2020

19.  NCM 2020: A Review of Gote and Toni Indices in 2020

20.  NCM 2020: NSE Records 1 New Listing to 5 Delistings in 2020

21.  NCM 2020: Growth of Securities Listed on NSE - Total Securities Listed Increased by 0.55%

22.  NCM 2020: 23% of Listed Companies on NSE on Pause in 2020

23.  NCM 2020: 84 Stocks Are Off 52-Week Highs as 85 Near 52-Week Lows

24.  NCM 2020: Forty-one Financial Services Stocks Are Penny Stocks in 2020

25.  NCM 2020: NSEASI Performance Review and How Each Company Fared in 2020

26.  NCM 2020: Market Records 57 Gainers to 66 Losers in 2020

27.  NCM 2020: Foreign Portfolio Participation in Equity Trading Dropped from March to November 2020

28.  NCM 2020: Trading Statistics in 2020 - Market Volume Increased by 21.69%

29.  NCM 2020: NSE Market CAP Closed at US$55bn Below the Peak of US$84bn Recorded in 2013

30.  NCM 2020: NSEASI Closed Green in 9 Out of 12 Months in 2020

31.  NCM 2020: Markets Were Volatile Globally in Year 2020 as COVID-19 Pandemic Induced Uncertainty

32.  The Nigerian Capital Market Report 2020: Leveraging a Crisis


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Monthly NCM

1.      The November 2020 Nigerian Capital Market Service Report - Proshare

2.     The October 2020 Nigerian Capital Market Service Report - Proshare

3.     The September 2020 Nigerian Capital Market Service Report - Proshare

4.     The August 2020 Nigerian Capital Market Service Report - Proshare

5.     The July 2020 Nigerian Capital Market Service Report - Proshare

6.     The June 2020 Nigerian Capital Market Service Report - Proshare

7.     The May 2020 Nigerian Capital Market Service Report - Proshare

8.     The April 2020 Nigerian Capital Market Service Report - Proshare

9.     The March 2020 Nigerian Capital Market Service Report - Proshare

10.  The February 2020 Nigerian Capital Market Service Report - Proshare

11.   The January 2020 Nigerian Capital Market Service Report - Proshare

12.  The November 2019 Nigerian Capital Market Service Report - Proshare

13.  The October 2019 Nigerian Capital Market Service Report - Proshare

14.  The September 2019 Nigerian Capital Market Service Report - Proshare

15.  The August 2019 Nigerian Capital Market Service Report - Proshare

16.  The July 2019 Nigerian Capital Market Service Report - Proshare

17.  The June 2019 Nigerian Capital Market Service Report - Proshare

18.  The May 2019 Nigerian Capital Market Service Report - Proshare

19.  The April 2019 Nigerian Capital Market Service Report - Proshare

20. The March 2019 Nigerian Capital Market Service Report - Proshare

21.  The February 2019 Nigerian Capital Market Service Report - Proshare

22. The January 2019 Nigerian Capital Market Service Report - Proshare


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Annual Reviews & Outlooks

1.        NCM2020 - Fin. MKT in Transition: Understanding Past Uncertainties; Preparing for New Possibilities

2.        Surviving Uncertain Times in the Nigerian Financial Market

 

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Special Reports & Publications

1.      NSE Ten Years After a Takeover: The Good, The Bad and Undecided

2.     NSE Post Takeover: A Journey Through Time

3.     NSE Post Takeover: The Story of Then and How

4.     NSE Post Takeover: Market as a Metaphor

5.     NSE Post Takeover: The Imperatives of Tomorrow: Myths, Risks and Opportunities

6.     NSE Post Takeover: Power Moves -Demutualization and The New Board Games

7.     NSE Post Takeover: A Whole New World-Reimagining Endless Possibilities

8.     NSE Post Takeover: Back of the Envelope


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Online Trading Reports

1.      Online Trading Ranking Report 2020 - Trading in a Period of a Virus; Building Good Habits

2.     Online Trading Ranking Report 2019 - Refining The User Experience; Trends In Digital Trading

3.     Nigerian Online Trading Portals Ranking Report 2018

4.     Nigerian Capital Market and FX Online Trading Portals Ranking Report H2 2017

5.     The Nigerian Capital Market Online Trading Portals Ranking Report

6.     The Nigerian Online Trading Report


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CMO Reports

1.        Nigerian Equity Market Outlook: COVID Out, Riots In?

2.        Nigerian Economic and Financial Markets: H1:2020 Review and H2:2020 Outlook Opportunity in a Crisis?

3.        Nigeria Economic Outlook 2021: A Shot at Recovery

4.        2021 Outlook - Is The Tunnel Getting Darker or Brighter

5.        Nigeria in 2021: Positioning in the New Normal

6.        Nigeria 2021 Outlook - Navigating Unsteady Terrain

7.        Nigeria FY 2021 Macroeconomic Outlook - A Break in the Clouds

8.        Nigeria 2021 Outlook: COVID-19 Recession and the Long Road to Economic Recovery


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Selected Articles

1.     The Year 2020 in Retrospect: A Bleak Year for Households

2.     Will Gold Prices Rally in 2021? Here are Its Ebbs and Flows

3.     Review of 2020 Activities In The Islamic Finance Market And The Outlook For 2021

4.     Ranking Global Equity Markets in 2020: NASDAQ Takes The Lead

5.     Holiday Blues Dampen Trading Activities for Last Trading Session

6.     2021:President Buhari Reaffirms Commitment To A United And Progressive Nigeria

7.     Ten Most Capitalised Stocks Account for 83% Contribution to the NSEASI

8.     Proshare's New Year Message - Change, Technology, and The New Corporate Calling


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News Posts Referenced in the Report

1.     NSE Revolutionises Public Offerings Subscription with Electronic Platform

2.     Finally, NSE Launches the Growth Board with FintechNGR as a Strategic Partner

3.     NSE Migrates      Four Companies from ASeM to Growth Board

4.     Demutualisation: NSE Announces Chief Executives for Emerging Entities

5.     NSE Members Assent to Demutualisation Resolutions at COM and EGM

6.     COVID-19: NSE Activates 30-day Remote Work Plan; Remote Trading to Continue

7.     FGN 14 Day Restriction: NSE to Sustain Remote Trading Amidst COVID-19 Pandemic

8.     CAC Issues Guidelines on Holding of AGMs of Public Companies Using Proxies

9.      COVID-19 and AGM by Proxy: Lessons from GTBank Approach

10.  Revision of Stamp Duty on NSE Transactions to 0.08% from 0.075% Effective 7th December 2020

11.  HM Zainab Shamsuna Ahmed Urges IST to Discharge Duties Diligently

12.  NSE to Re-Introduce Trading Fees for Securities Traded on the Fixed Income Market



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