NSE Insurance index emerges second best performing sector index in 2018

If you were looking to insure your market risk and you were out of options, then adding some insurance stocks into your portfolio in 2018 may have adequately done the job. Last year, insurance sector was among the best performing sectors on the broad market, shedding only around 9.25 percent compared to the overall Nigerian Stock Exchange All Share Index which declined by 17.81 percent.

In the first half of the year, the insurance index gained 7 percent in the first half of 2018 making it the best performing index on the bourse for the period before its performance nosedived in the second half on the year. NEM Insurance, the fourth best performing stock of 2018, recorded the highest growth of 62.5 percent in the sector and was followed by AIICO (21.15 percent) and Linkage Assurance (9.09 percent).

The 2018 NSE Market Recap and 2019 Outlook presentation by CEO, Oscar Onyeama on January 14, 2019, highlighted the 2018 index performance alongside the 2019 economic review and strategic performance of the local bourse. The breakdown of all 13 indexes show that excluding the Insurance Index and Oil and gas index, all major market indices suffered high double-digit losses.

On a sectorial basis, oil and gas sector was the best performing sector in the market as the index declined by only 8.61 percent, as the industry benefited from rising oil price in the first half of the year before oil prices began to decline in the last 3 months of the year which wiped out gains in the sector. Insurance sector followed closely behind as the secondbest performing sector in the market, declining by around 9.25 percent.

The banking index performed slightly better than the overall index after it declined by only 16.09 percent. Consumer goods index and industrial goods index were among the worst performers after they declined by 23.28 percent and 37.34 percent respectively.

The 16 paged report delivered by Onyema described 2018 market performance aptly, saying, “the NSE All Share Index reached a ten-year peak of 45,092.83 index points in January. This was largely driven by the positive performance of the NSE ASI in 2017 which emerged as the 3rd best performer globally. As we approached the second quarter, political risk, oil price volatility and rising yields resulted in bearish sentiments that saw the ASI and equity market capitalization fall by 17.81 percent and 13.87 percent closing at 13,430.50 and N11.73 trillion respectively.”

The NSE All Share Index closed higher yesterday at 0.58 percent while the NSE insurance index returned 3.5 percent yesterday.

The 15 stocks on the NSE Insurance Index include, AIICO Insurance Plc, Lasaco Insurance, Law Union and Rock Insurance, Linkage Assurance, Sunu Assurance, AXA Mansard, Mutual Benefits Assurance, NEM Insurance, Niger Insurance, Prestige Assurance, Consolidated Hallmark Insurance, Cornerstone Insurance, Regency Assurance, Sovereign Trust Insurance and WAPIC Insurance.