Investors in the Nigerian equities market recorded a growth of N1.88 trillion in their wealth in January while the market recorded a turnover of 9.877 billion shares worth N129.626 billion.
Having declined by 14.6 per cent last year, stakeholders were upbeat that the market would recover this year as investors embarked on bargain hunting.
True to expectations, the market started the year on a bullish note with the Nigerian Stock Exchange (NSE) All-Share Index and market capitalisation peaking at 29,710.56 and N15.304 trillion respectively on January 20.
However, the market began to decline in the last week of the month as some investors embarked on profit-taking, coupled with negative reactions that greeted the mixed earnings reported by some companies in their 2019 full-year interim results.
Despite witnessing five days of negative performance, the market still ended January with a gain of N1.88 trillion as the market capitalisation rose from N12.969 trillion to N14.857 trillion.
On the other hand, the NSE All-Share Index rose by 7.5 per cent, from 26,842.07 to 28,843.53.
The market was also very active as investors traded 9.877 billion shares valued at N129.626 billion in 112,724 deals.
A weekly analysis of the market turnover showed that the second week of the month accounted for the highest trading as investors exchanged 2.683 billion shares worth N32.646 billion in 30,956 deals.
The third week of the month followed, recording 2.087 billion shares valued at N26.470 billion in 24,262 deals, while investors traded 1.561 billion shares worth N26.073 billion in 21,444 deals in the last week of the month.
The fourth week accounted for N22.762 billion invested in 1.237 billion shares in 21,156 deals just as first week recorded N21.675 billion staked on 2.309 billion shares in 14,906 deals.
Commenting about his expectation from the stock market this year in an interview with THISDAY, the Co-founder, CardinalStone Partners Limited, one of the leading investment banks, Mr. Mohammed Garuba, said: “The stock market will go up this year, largely because there would be some support.
“Bank stocks would not do very well because of the over-regulation. The real sector would definitely do well. Investors are getting frustrated, they can’t even get primary bills to buy, even though they have money.”
Also, in their review of the global stock market performance, analysts at Afrinvest (West Africa) said while the market started 2020 positively posting one of the best returns in the first two weeks of the year, the market was unsettled by investors’ reactions to the outbreak of Coronavirus in China and interim earnings reports by companies.
“The outbreak of “Coronavirus” in Wuhan, China and the aggressive pace of infections, with reported cases in over 15 countries, unsettled global markets this week.
“Market reaction was driven by the potentially catastrophic impact the virus could have on global economic activities and company earnings, especially in China.
“Elsewhere, as risks to the global economy remain elevated, central banks in advanced economies maintained a dovish stance in recent meetings,” they said.
The analysts said the downtrend recorded in the last week of the month, would be sustained this week.
“We believe that the market would continue this downtrend, especially as earnings released this week has been largely mixed and insufficient to boost investor confidence,” they added.
Similarly, analysts at Cordros Capital said the negative trend would persist this week.
“In our view, the trend witnessed this(last) week is likely to persist as the dual impacts of the weakening sentiment and mixed-earnings performances during earnings season are expected to pressure market return. Nonetheless, we advise investors to focus on taking positions in fundamentally justified stocks,” they said.