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Nigerian Stock Market Declines in 1st quarter

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Image : The Nigeria Stock Exchange Head headquters   Abuja  

April 03/04/2012

The nation’s stock market rose by 2.6 per cent in March as the Nigerian Stock Exchange (NSE) All-share Index closed at  20,652.51 from 20,123.47 of the beginning of the month .                         
This was an improvement on the decline of 3.6 recorded in February and a growth of 0.7 per cent in January.  
However, the March growth  was not strong enough to lead to overall positive return for the first quarter, hence it ended with a decline of 0.38 per cent.

In all, the market declined by  0.38 per cent in the first quarter with the index  falling from 20,730.63 to close at. 20,652.47.

But the market capitalisation of equities rose by N16 billion to close higher at N6.549 trillion following the listing of  fresh shares on the Exchange.    
Market operators  said that the decline in the Q1 might affect the attainment of 14 per cent growth in the index in 2012 projected by analysts.

While the growth was predicated on expected improved earnings from manufacturing firms and banks, the losses posted by some banks was said to have dampened investors’ demand in the last weeks of the quarter.

First City Monument Bank Plc and Diamond Bank Plc have already posted losses in their operations for 2011 while United Bank for Africa Plc is being expected to announce is loss.

Commenting on the performance of the market in Q1, the Managing Director of Sterling Capital Limited, Mr. Gaventa Otono, said the marginal decline resulted from investment switch from the equities market to fixed income securities due to higher yields and weak investor confidence.

“The marginal decline of 0.38 per cent recorded in the Nigerian bourse may likely be as a result of investment switch from the stock market to fixed income securities due to higher yields in the segment of the financial market,” Otono said.

He added that weak investor confidence might have also continued to delay recovery of the market.

“Although, the market gathered some level of momentum induced by the release of impressive results and corporate actions declared by some banks and blue chips, investors however resorted to profit taking towards the close of the quarter” the Sterling Capital Limited boss stated. 

The management of the Nigerian Stock Exchange (NSE) and  Securities Exchange Commission (SEC) had at the beginning of the year expressed confidence on the recovery of the market, given the  efforts being made to restore investor’s confidence.

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Updated 7 Years ago

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