Stocks end first quarter with N780bn losses

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.