Q1: Domestic transactions of equities increase by 89%

•Equities market closes week with +4.4% gain

THE total domestic transaction of equities on the Nigerian Stock Exchange (NSE) increased by 89.01 per cent in the first quarter of year 2020 compared to transactions in the corresponding period of 2019.

According to the report by the NSE on domestic and foreign portfolio participation in equities trading, total equities market transactions increased in Q1 2020 compared to transactions done in the corresponding period of 2019. The ratio of total domestic transactions to total foreign transactions tilted to 60:40 in Q1 2020, from 47:53 in Q1 2019, given the 89.01 per cent increase in total domestic transactions as compared with the marginal 13.52 per cent rise in total foreign portfolio transactions.

Specifically, total transactions on the nation’s bourse increased to N626.87 billion in Q1 2020 from N420.26 billion recorded in Q1 2019; of which total domestic transactions increased to N374.98 billion from N198.39 billion while FPI transactions rose to N251.87 billion from N221.87 billion.

Breakdown of the FPI transactions in Q1 2020 showed that foreign portflio outflows increased by 50.19 per cent to N186.60 billion; however, the foreign portfolio inflows dropped by 33.15 per cent to N65.27 billion. Domestic institutional transactions spiked year on year by 102.94 per cent to N203.53 billion in Q1 2020. Also, retail investors’ interest in equities market were stimulated by lower share prices, as transactions from this group rose sharply to N171.45 billion in the quarter under review from N98.10 billion in Q1 2019.

Amid significant sell-offs, particularly by the foreign portfolio investors, the NSE All Share Index (ASI) plummeted by 20.65 per cent to 21,300.47 index points in Q1 2020 when compared to a 1.24 per cent decline to 31,041.42 index points in Q1 2019. The sharp decline in fixed income yields, especially treasury bills stop rates which dropped for all the three maturities (91-day, 182-day and 364-day stop rates fell to 2.20 per cent, 3.20 per cent and 4.30 per cent in March 31, 2020 from 3.00 per cent, 4.00 per cent and 5.7 per cent in February 26, 2020, and 10.90 per cent, 13.09 per cent and 14.37 per cent in March 31, 2019) suggest that investors opted for capital preservation amid COVID-19 pandemic.

Analysts at Cowry Asset Management however expect the local equities market index to remain bearish even in the second quarter of the year as FPIs trade cautiously amid negative effect of COVID-19.

Analyst, however, emphasize the need for the federal and states governments to increase their investments in education as the skill sets needed to take Nigeria to, and beyond, the industrial age must be acquired. Hence, we expect government to boost spending towards improving human capital, even as it is currently doing on physical infrastructure, in order to reduce the high rate of poverty and inequality in the country via industrialization which creates more employment opportunities for citizens.

Meanwhile, in line with expectations, the local equities market closed in the green amid sustained bargain hunting activity. Hence, the local bourse climbed by 4.45 per cent week-on-week, resulting in increase of the NSE ASI to 24, 045.40 points. Similarly, all of the sub-sector gauges closed northwards, especially the NSE Consumer Goods which rose significantly by 8.45 per cent to 402.49 points.

Also, the NSE Banking index, NSE Insurance index, NSE Oil/Gas index and NSE Industrial index grew by 3.99%, 2.76%, 2.83% and 2.20% respectively to 282.41 points, 125.24 points, 215.04 points and 1,034.88 points respectively. Elsewhere, market activity was weak as total deals, transaction volumes and Naira votes moderated by 17.33%, 15.35% and 29.23% to 17,023 deals, 1.01 billion shares and N9.89 billion respectively.

However, investors are cautioned to trade carefully as it is expected that the local equities market might close in red in the new week as investors book profit given the two consecutive weeks of bullish activity.

 

YOU SHOULD NOT MISS THESE HEADLINES FROM NIGERIAN TRIBUNE

Buy and read digital replicas of your TRIBUNE titles by subscribing through E-VENDING

Lagos Will Not Hesitate To Review Easing Of Lockdown If… ― Sanwo-Olu
Lagos State governor, Mr Babajide Sanwo-Olu, on Saturday warned that the state government will not hesitate to review the terms of easing of lockdown currently in operation if it continues to see evidence that Lagosians are determined to flout the rules… Read full story

Agency Arrests LG Chairman For Allegedly Sharing Palliatives To Police, DSS, Others
Kano State Public Complaints and Anti-Corruption (PCAC) has arrested Kumbotso Local Government Council Chairman, Alhaji Kabiru Ado Panshekara over alleged abuse of power in the distribution of government palliatives in his local government… Read full story

Journalist Tests Positive For COVID-19 In Bauchi
A journalist working in Bauchi State has tested positive for the novel coronavirus, the state’s deputy governor, Mr Baba Tela, announced on Saturday. Tela, who is also the chairman of the Bauchi State Task Force on COVID-19 and Lassa fever, made the announcement at a news conference at Government House in Bauchi… Read full story

Yoruba, Biafra UNPO Membership: Risk Of Nigeria Breaking Up Now Higher
Concerns over the risk of Nigeria breaking up with some ethnic nationalities pulling out of the union appear to have been heightened with the admission of the Yoruba and Igbo nations into the Unrepresented Nations and Peoples Organisation (UNPO)… Read full story

Latter-Days Saints Refutes Claim Church Refunding Tithes To Members
Contrary to the news doing the rounds that the Church of Jesus Christ Latter-Days Saints, has concluded plans to refund the total amount of money paid as tithe in the last three years to members across the world to cushion the effect of the coronavirus pandemic, the church has debunked the news as well as described it as fake… Read full story

COVID-19: 160 Stranded Nigerians Depart U.S For Abuja
The first batch of Nigerians stranded in the United States due to the coronavirus (COVID-19) pandemic are on their way back home. The News Agency of Nigeria (NAN) reports that 160 Nigerians, including eight infants, made the first batch of evacuees… Read full story

Police, NSCDC Officers Beat Up Soldier For Refusing To Wear Face Mask
A combined team of men of policemen and men of the Nigerian Security and Civil Defence Corps (NSDC) beat up a soldier in Benin on Saturday after he allegedly refused to wear a face mask. The incident happened between 1 pm and 1:30 pm at the popular Lagos Street/Oba Market Street junction in downtown Benin… Read full story

A’Ibom Intercepts Dead COVID-19 Victim, Isolates 6 Smugglers Of Body From Lagos
Border police officers manning the major entry point into Akwa Ibom State at the Abia/Akwa Ibom common boundary at Obot Akara Local Government Area have intercepted the remains of a suspected coronavirus patient said to have been smuggled into the state from Lagos… Read full story

I’m Not The Cause Of Your Problem, Ortom Tells Benue Index Case
Governor Samuel Ortom of Benue State has informed the United Kingdom returnee who is the state’s COVID-19 index case, Mrs Susan Idoko Okpe, to redirect her grievances to the Nigeria Centre for Disease Control (NCDC), saying he is not the architect of her woes… Read full story

Warm Weather Doesn’t Curb COVID-19 Spread, Studies Reveal
Contrary to the general knowledge across the globe, two studies have revealed that warm weather does not kill off the coronavirus or curb its spread. The Daily Mail of UK reported that the studies, carried out by US and Canadian researchers, analysed more than 370,000 cases in thousands of different cities in… Read full story

COVID-19: Lagos To Introduce Community Management Of Cases
Lagos State government says it will introduce the management of COVID-19 patients at community levels, so as to enhance the management of cases in the state. The state governor, Mr Babajide Sanwo-Olu, made the disclosure while giving an update on the management of COVID-19 and review of the lockdown… Read full story

You might also like
Comments

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. AcceptRead More