Funds movement behind capital market stability, says operators

Nigerian Stock Exchange

Nigeria’s capital market has been stable in recent times.

Some operators in Nigeria’s capital market have attributed the recent stability in the Nigerian Stock Exchange, NSE, to movement of funds by some institutional investors due to low yields from bonds and treasury bills.

According to the operators, the low yields from the N147 billion treasury bills sold by the Central Bank of Nigeria, CBN, made the capital market more attractive, while recent local and international developments were also working in favour of the market.

One of the operators, who are the Managing Director of APT Securities and Funds Limited, Garba Kurfi, said that more pension funds administrators were investing in the market due to higher yields being offered by equities.

According to Mr. Kurfi, the country’s foreign reserve of over $40 billion was boosting the confidence of foreign investors in the market, adding that the recent increase in the volume of stocks from the initial 16 to 25, achieved through the market makers, also contributed immensely to the market stability.

Mr. Kurfi said that the market would likely lose some points due to profit taking. He added that the expectations of improved third quarter results would sustain the confidence of investors.

The Managing Director of Union Standard Securities Limited, Sehinde Adenagbe, said the introduction of securities lending and short sell by market markers brought some level of stability; while the Chief Executive Officer of Lambeth Trust and Investment, David Adonri, is of the view that the market needs further deepening through long-term investments to sustain growth recorded so far.

Mr. Adonri said that the Federal Government should be more active in the market through listing of privatised companies.

Meanwhile, investors traded 4.78 billion shares worth N40.47 billion in 20,364 deals last week, against the 1.70 billion shares worth N14.54 billion traded in 24,202 deals in the preceding week.

The consumer goods sector accounted for 3.23 billion shares worth N32.4 billion in 3,902 deals, followed by the financial services sector with 905.26 million shares valued N6.23 billion in 11,327 deals.

The All-Share Index, API, rose by 431.03 points to close at 26, 442.67 from the 26,011.64 posted in the previous week, with Nestle leading the gainers’ table, appreciating by N35 to close at N615, while Guinness followed with a gain of N17.20 to close at N277.20 per share.

Dangote Cement topped the losers’ table, shedding N4.50 to close at N118.50, while MRS Oil Nigeria trailed with N1.61 to close at N30.68 per share.

The NSE on October 4 increased the number of market marking stocks to 25 from the initial 16, with introduction of additional nine stocks.

The stocks are Access Bank, Academy Press, Custodian & Allied Insurance, First Bank, Dangote Sugar, Union Bank, National Salt, Nestle and Aiico Insurance.


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