Stocks end first quar­ter with N780bn losses

Daily Trust - - BUSINESS - From Kay­ode Ogun­wale, La­gos

The Nige­rian eq­uity mar­ket has been on a down­ward trend since be­gin­ning of the year de­spite im­pres­sive per­for­mance by many com­pa­nies.

An­a­lysts had at the be­gin­ning of the year pre­dicted the mar­ket will face a tur­bu­lent time to­wards the end of this year.

The mar­ket cap­i­tal­i­sa­tion of the eq­uity listed on the bourse in the first three months of the year recorded a de­cline of N780 bil­lion (or 5.90 per cent) as against N1.8 tril­lion gained dur­ing the same pe­riod of 2013.

The mar­ket cap which opened the year with N13.226 tril­lion closed at N12.446 tril­lion at March 31.

Con­se­quently, the NSE All Share In­dex which is the bench­mark of the mar­ket closed lower at 38,748.01 ba­sis points at the end of March 2014 from 41.329.19 points it opened the year.

At the end of 2014 first quar­ter all the sec­to­rial in­dexes closed lower, apart from NSE In­dus­trial Sec­tor In­dex that closed higher.

NSE Bank­ing In­dex de­clined by 16.64 per cent dur­ing the pe­riod un­der re­view while NSE Oil and Gas In­dex was down by 15.20 per cent and NSE Con­sumer Goods with 12.11 per cent drop.

Oth­ers are NSE In­sur­ance In­dex with 11.28 per cent dropped, NSE 30 In­dex which mea­sure 30 most cap­i­talised stock on the ex­change de­clined by 9.08 per cent, NSE Lo­tus Is­lamic In­dex which mea­sures Sharia com­pli­ant Is­lamic stocks dropped by 3.59 per cent and Al­ter­na­tive Se­cu­ri­ties Mar­ket (ASem) In­dex closed lower with 1.03 per cent.

NSE In­dus­trial In­dex is the only in­dex that closed higher at the end of 2014 first quar­ter with 1.59 per cent.

So far over N150 bil­lion have been de­clared as div­i­dend by var­i­ous com­pa­nies this year based on the mas­sive gains made in their 2013 fi­nan­cial year.

But in­stead of the mar­ket to re­act pos­i­tively to this de­vel­op­ment it re­sponded neg­a­tively.

Speak­ing at a func­tion early this year, Man­ag­ing Di­rec­tor, Fi­nan­cial De­riv­a­tive Com­pany Limited, Bis­marck Re­wane, pre­dicted that the Nige­rian stock mar­ket would record lesser growth at the end of this year.

Cit­ing the rea­son why growth will drop in 2014, Re­wane said lower re­turns were ex­pected in 2014 as a re­sult of ta­per­ing by the United States Federal Re­serve, and in­creased spend­ing in the build-up to the 2015 gen­eral elec­tions.

He be­lieved that in­sur­ance, build­ing ma­te­ri­als (ce­ment com­pa­nies in par­tic­u­lar) and bank­ing stocks are go­ing to be favourable stocks in 2014.

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