By Peter Egwuatu
INVESTORS in the nation’s stock market have lost over N187 billion in the first three weeks of trading in 2017, as market capitalisation of the Nigerian Stock Exchange, NSE, closed, Friday, at N9.059 trillion. The market capitalisation which represents the total value of investment by investors in the stock market dropped by 2.03 per cent from N9.246 trillion it opened the year with on January 03, 2017.
In the same vein, another stock market gauge, The NSE All Share Index, which represents the price movement of stocks of quoted companies also went down by 2.03 per cent to close last week Friday at 26,328.22 points as against 26,874.62 points with which it opened the year on January 03, 2017.
However, further analysis of the market performance within last week had shown a sign of recovery as investors regained over N37 billion last week, bringing their total stock value from N9,058trillion it closed penultimate week to N9.059 trillion last weekend.
But an investment analyst firm, Cordros Capital was not optimistic on the overall performance in this period stating: “we do not expect any impressive performance in this space, (equities) as investors are still wary of the macroeconomic environment.”
Reacting to the state of the market performance, the National Coordinator, Proactive Shareholders Association of Nigeria, PROSAN, Mr. Oderinde Taiwo said, “some of the stocks still hold high value and good fundamentals and are expected to still give good returns to investors. However, investors can take advantage of the lowly priced consumer goods stocks as the fortunes of these companies are expected to improve on the backdrop of the expansionary plans of the government and in the long run, an improved enabling environment will trickle down into the earnings of these companies and increase the overall return for investors.”
Meanwhile, the NSE had disclosed that 94 per cent of stock-broking firms have met its Minimum Operating Standards, MOS. Chief Executive Officer of the NSE, Mr. Oscar Onyema, who disclosed this on the sideline during the induction ceremony for newly qualified stockbrokers in Lagos, weekend, said “the MOS was introduced to ensure a stronger, more efficient broker-dealer community that is well suited for doing business in the 21st century.”
Onyema assured that the NSE will continue to monitor compliance to ensure that the standards are maintained. He recalled that it was one of several initiatives put in place to enhance the experience of issuers, dealing members, investors, and other stakeholders.
According to him, “some of the initiatives targeted at the dealing brokers include: x-whistle, which enables market participants to confidentially report fraud and infractions, and x-compliance report, a transparency initiative designed to help maintain market integrity by providing compliance related updates on all listed companies; compliance status indicator symbols for near real time update of company compliance status on the ticker tape; and brokertrax for the compliance status of the brokers and dealing clerks on the Exchange.
“To automate and enhance the regulatory and oversight function of NSE over its dealing members in the area of rendition of regulatory filings, analysis of financial renditions, capital and liquidity monitoring as well as compliance monitoring and reporting in line with global best practices, we developed and launched x-boss. We also launched SMARTs solution for efficient/effective market surveillance.” Poised to remain a sustainable Exchange, Onyema said: “the NSE continues to highlight the importance of sustainable business practices in delivering value and supporting economic growth.”
Sustainable business practices
The NSE, he maintained, has always practiced what it preaches by holding itself accountable to the highest standards, besides intensifying its advocacy efforts to support the integration of the Environmental, Social and Governance (ESG) imperatives in the Nigerian capital market.
Onyema disclosed that the Exchange’s Sustainability Disclosure Guidelines will be launched this year. He stated: “As we continue to work on our goal of becoming a more agile and demutualized exchange, the importance of your role cannot be over emphasized.”