The capital market has remained on a positive note with increase in investors’ activities a week after the Asset Management Corporation of Nigeria (AMCON) bill was signed into law.
At the close of trading session on Monday, the two main parameters for measuring market performance at the Nigerian Stock Exchange (NSE) -market capitalisation and All-Share Index-inched up by 1.02 per cent to close at N6.243 trillion and 25,527.44 basis points, from N6.179 trillion and 25,269.36 recorded last Friday. The NSE has recorded about N186 billion gains since the recent rebound.
Analysts at Proshare Nigeria Limited said the positive performance recorded so far cut across all the sectors on the bourse, “but could be attributed mainly to good performance recorded in the banking and some other blue chips stocks.” They said as market outlook remains positive, the trend in some sectors showed indications of profit taking by investors as sell pressures seem to be gaining momentum. “This may be sending signals that profit taking activities may be more prominent in the coming days.”
Banking sector retains lead
The banking sector led the market transaction volume on Monday with 255.402 million units valued at N2.182 billion exchanged in 3,611 deals. Transactions in the shares of United Bank of Africa, Zenith Bank, Platinum Bank, and First Bank Nigeria boosted the volume traded in the sector.
The total volume of 136.138 million units valued at N1.370 billion traded in the shares of the four banks accounted for 53.30 per cent of the entire sector volume and their value represented 62.79 per cent of the sector’s value. The number of gainers at the close of trading session closed at 35 compared with the 40 gainers recorded on the previous trading day, while losers closed at 29 as against the 22 recorded in the preceding trading day.
Upturn remained dominant in the banking stocks as transactions in the sector closed with 15 gainers to three losers compared with the 17 gainers to two losers recorded last Friday. Analysts say investors’ interest in the sector continues to grow stronger by the day. The upbeat trend influence in the breweries sector remained relatively as the only price change recorded was on the positive note, a reverse of the previous day’s trend. Performance of stocks in the conglomerate sector at the close of trading session reflected stronger sell pressures as transactions closed in the sector with two losers compared with one gainer to a loser recorded on Friday.
The number of gainers in the Food/Beverages sector declined to one compared with five gainers recorded on Friday while the number of losers closed at one, a repeat of the previous day’s losers figures. Proshare analysts say stocks in the sector also present “buy opportunities for discerning investors.”
Market outlook
Commenting on the economy outlook for the second-half of the year, Biodun Adedipe, chief executive officer of Biodun Adedipe & Associates Limited, a business consultancy firm, said, “A combination of the need for continued stimulation of the economy and the political activities in 2010 towards general elections of 2011 will create liquidity surfeit.” Mr. Adedipe, said the recent banking reforms, though necessary at the time they were introduced “have not been well managed to achieve the intended results.” He, however, said that the central bank, in the second-half of the year, will want to be careful about liquidity management and may not run a restrictive monetary policy.
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