Stock Investors Earn N629bn Gains In November

Investors in the Nigerian stock market earned about N629 billion as net capital gains in November 2021 as renewed interest across the market drove average returns to its recent high.

Aggregate market capitalisation of all quoted equities at the Nigerian Exchange (NGX) rose by N629 billion to close yesterday at N22.567 trillion, from the N21.938 trillion recorded as the opening value for the month.

The All Share Index (ASI) – the benchmark index also appreciated by 2.90 per cent from the 40,270.72 basis points at the beginning of November to lose at 43,248.05 basis points. Average year-to-date return now stands at 7.4 per cent.

The stock market in 2021 has been confronted with foreign investors’ exit, double-digit inflation rate that discourage investment as well as rising in fixed income rates, which have resulted in a liquidity exodus from the equities market.

Also, the managing director, Highcap Securities Limited, Mr. David Adnori, attributed stock market to impressive listed companies’ nine months corporate earnings and improved macroeconomic conditions.

According to him, the rising price of crude oil also increased demand for stocks on the NGX. The growth may extend to year end as most Q3 results are fantastic.

He added that, “The rebound in the stock market is expected to extend till year ended because of steady increase in global oil prices.

“The recovery of the stock market could have been better but insecurity in the nation led to hike in inflation rate and investors have to react negatively.”

The chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion said that despite the volatility and selling pressure in November, the market closed the month positive, ushering in a buy and bullish December as players continue to reposition their portfolio in line with dividend expectations for the current year-end.

He added that “We expect the market to close positively this year, with seasonality and cycles likely to influence equity prices ahead of year-end window dressing.

“The low volume traded in the midst of pullbacks is creating new buy opportunities on the strength of the Q3 numbers. Also, candlestick formation and volume traded during the session revealed that institutional players are not selling but positioning in blue-chip companies, as the index slide on a light volume. It is equally noteworthy that during a ranging market many players seat on the fence waiting for a breakout or down before jumping into any position. Even as many stocks are trading within their buy ranges, a situation expected to attract more funds into the stock market, given the dividend yield capable of serving as a hedge against inflation.”·