Quoted firms on the Nigerian Stock Exchange (NSE) ended the first half of 2018 with a gain of N256.95 billion following a rise in market capitalization from N13.609 trillion on the last trading day of 2017 to N13.866 trillion on June 29, 2018, translating to 1.89 percent increase in market capitalisation during the period. However, this gain pales into insignificance when compared with N1.38 trillion increase in market capitalisation at the end of the first quarter of 2018.
The All Share Index (ASI) closed last weekend at 38,278.55 points compared with 41,504.51 points at the end of the first quarter of 2018. At half year 2018, ASI posted a marginal 0.09 percent gains when compared with its closing figure on the last trading day of 2017.
Analysts are however of the opinions that the equity market will rally in the second half of the year as notable companies declare interim dividends and institutional investors react to different trade wars being waged by the United States President Donald Trump on its allies.
“Interest rates normalisation in the US and fears about the forthcoming general elections are forcing foreign investors to sell down their stakes in the Nigerian capital market. But we expect the market to rally in the second half because we anticipate higher consumer spending and upon the implementation of multi-fund structure by PFAs”, said Razaq Abiola, head investors’ relations at the United Bank for Africa (UBA).
Listed companies such as Zenith Bank, GTB, Access, UBA and Stanbic IBTC have the tradition of declaring interim dividends at half year. This is expected to attract interest into the equity market because the fundamentals of the listed firms are still very strong.
“We expect investors to react to President Trump’s trade wars with China and Europe, because apprehension is high as no one is sure of his next line of action. So, in the second half of the year, most of the foreign investors will still come back into the Nigerian market”, Abiola added.
Since assumption of office, President Donald Trump has waged different trade wars with Mexico, Canada, China and recently, countries in the European Union. This is expected to have ripple effects on movements of funds in and outside the United States.
Meanwhile, as at the close of business at half year, 51 stocks appreciated in prices as against 64 stocks at the end of the first quarter. Similarly, 58 equities depreciated in prices compared with 35 stocks that closed in the negative territory at Q1.
