Investors networth on the Nigerian Stock Exchange (NSE) depreciated by 1.83 per cent in January from the 6.19 per cent growth achieved in December, the News Agency of Nigeria (NAN) reports.
Available statistics from the NSE for the period under review showed that the All-Share Index decreased by 757.57 points to close the month at 40,571.62 points against 41,329.19 points in December 2013.
The market capitalisation dropped by N221 billion to close at N13.01 trillion compared with a growth of N778 billion achieved in December 2013 to closed at N13.23 trillion.
The volume of shares traded at the bourse also dipped by 20.32 per cent, as eight billion shares worth N85.84 billion was exchanged in 110,405 deals.
The turnover was against the 10.04 billion shares valued at N71.12 billion traded in 90,765 deals in December, 2013.
The financial services sector remained the toast of investors during the period, accounting for 5.71 billion shares worth N41.3 billion traded in 57,099 deals.
Some stakeholders attributed the decline in the market growth during the period to increase in Cash Reserve Requirement (CRR) on public sector funds by the Central Bank of Nigeria (CBN).
They told NAN in separate interviews in Lagos that the CRR review led to channelling of funds from the equities market.
The CBN had on January 21 raised the CRR on public sector deposits, including deposits from the three tiers of government from 50 per cent to 75 per cent.
Mr Olaleye Williams, the Managing Director, Global View Consult & Investment Ltd., said the market rally was “stalled by the CBN bombshell of CRR upward review.”
“We started with a promising growth that was to herald a strong rally by the month end but were halted by the outcome of the Monetary Policy Committee meeting,” William said.
He also said the market would rebound in February with expectations of impressive results for 2013 financial year.
Mr David Adonri, Chief Executive Officer, Lambeth Trust & Securities Ltd., said the decline experienced in January was as a result of sales pressure mounted by both foreign and local investors.
Adonri said the situation in the international capital market made foreign investors to
offload their holdings in the Nigerian equities market.
He said that the tight monetary policy of the CBN affected the growth of the equities market and the productive real sector.
Adonri said the market would experience improved activity in February because of the activities of market makers in ensuring market stability and higher dividends.
Agency Reports
