| Capital Market |    1317 VIEWS  |
| Capital Market | |
| 1317 VIEWS | |
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Thursday, December
03, 2020 /10:39 AM / by NSE / Header Image Credit: The Nigerian Stock Exchange
Players in the
Nigerian equities market appear to be riding the waves of the market rally with
investors gaining N55.2bn
on Tuesday, 01 December 2020. This saw market capitalisation rise to N18.4tn while Year-to-Date (YTD) return improved to 30.9%, making the
Nigerian equities market the 2nd and 3rd best performing
market in the world in local currency terms and US Dollar terms, respectively,
according to Bloomberg.
Growth in the
equities market has been driven by domestic retail and institutional investors
targeting Nigerian companies with strong fundamentals, expecting that they will
weather the storm of the COVID-19 pandemic and be able to distribute dividends
to shareholders. The total value of transactions executed by domestic investors
on The Nigerian Stock Exchange (NSE or The Exchange) stood at N825.94Bn in the
first nine months of 2020. It is also evident that the equities market
continues to respond positively to macroeconomic policy changes such as the cut
in Monetary Policy Rate (MPR) by 100 basis points from 12.5% to 11.5% by the
Central Bank of Nigeria (CBN) in September 2020.
The Exchange has
remained resilient even in the face of the COVID-19 pandemic. It would be
recalled that on Thursday, 12 November 2020, the NSE All Share Index (ASI) posted
its largest daily gain in more than five years. The ASI rose beyond the set threshold of 5%, triggering a 30-minute trading
halt of all stocks for the first time since the circuit breaker was introduced
in 2016.
What is also
noteworthy is that as multi-asset Exchange hub, The Exchange continues to
recognize opportunities in the alternative investment asset space and is
working assiduously with stakeholders to deepen market activity across these
asset class. In the fixed income space, capitalization has risen to N17.7Tn
from N12.9Tn as at the end of 2019 as a result of increased listing activity
from the Federal Government and Nigerian corporates.
The Exchange Traded
Fund (ETF) segment of the market continues to enjoy investors' attention with
the NewGold ETF returning 78.36% YTD, the Vetiva S&P Nigeria Sovereign Bond
ETF returning 45.93% YTD, the Lotus Halal Equity ETF returning 43.99% YTD, and
the Vetiva Industrial ETF returning 55.79% YTD. In September 2020, The Exchange
listed two new ETFs from Meristem Wealth Management Limited - Meristem Growth
(MERGROWTH) and Meristem Value (MERVAL) ETFs which are expected to further
attract market activity.
Ultimately, there
is immense value to be reaped for the Nigerian capital market even in the face
of current realities. Investors are, therefore, encouraged to take advantage of
the dynamism of the capital market by seeking out profitable investment
opportunities across available asset classes.
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