Tuesday, July 19, 2016 3.38 PM / TheAnalyst
NSE 30 index is a tracker that tracks the 30 most capitalised and liquid stocks on the Nigerian bourse - analysis revealed strong correlation between the key benchmark index and NSE 30 index. Most of the time in the year both moved in the same direction. Recently, the index slipped into negative zone, as some big capped member stocks were hit on the back of weak fundamentals.
The impressive gain of 16.96% witnessed in Q2’16 has been erased across key sectors particularly in the month of July. This can be attributed to the ongoing price correction and increased volatility on the Nigerian bourse as investors switched into cautious mood.
Analysis revealed that NSE 30 index pared gains to post negative YTD returns of -0.98% as against its Half-year returns of 2.23% gain. Also, we observed that majority of NSE sectoral indices extended losses significantly as NSE Oil and Gas index remained the worst hit with YTD loss of 8.90% as against its Half-year loss of -9.13%.
In addition, out of 11 sectoral indices, only 4 indices posted positive returns in both half-year and YTD returns. This technically reveals the composition of stocks on investors’ radar so far in 2016.
This report focuses on NSE 30 index, with further highlights of the stocks that had weakened the performance of the index in the recent time, as NSE 30 is now trailing the All Share Index in terms of YTD returns. The NSE 30 index tracks 30 most capitalised and liquid stocks on the Nigerian bourse- the capitalisation of the index represents above 90% of market capitalisation.
Extensive analysis revealed that the weakness observed in the performance of NSE 30 index could be a signal of weak fundamentals of some member stocks within the group.
2. MSCI proposes to reclassify Nigeria Index to standalone status