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Investors recover from bearish May to gain N2.7trn MtD

By Peter Egwuatu

DESPITE the loss of over N88 billion at the end of the last trading day in May 2019 on the Nigerian Stock Exchange, NSE, investors recorded a cumulative gain of N2.721 trillion Month-to-Date, MtD,  following the listing of the MTN Nigeria Telecommunications Plc  during the month under review.

Specifically, the NSE market capitalisation which opened during the month of May at N10.963 trillion closed the month at N13.684 trillion as MTN added N1.8 trillion to the market during its listing of shares on the Exchange

In the same vein, another equity gauge, the NSE All Share Index, ASI recorded a gain of 1,909.63 points to close at 31,069.37 points from 29,159.72 points it opened with at the beginning of the month.

Stock,sentiment
The floor of Stock exchange

Meanwhile, market activity declined at end of the month with volume and value traded dipping 44 percent and 54 percent respectively.

Banking sector gained (+3.94 percent), Insurance (+3.28 percent), Oil & Gas (+2.14 percent), Consumer Goods (+1.31 percent) and  Industrial Goods gained  (+1.30 percent) to close positive,  further signifying the positive sentiment in the week of trading.

Reacting, analysts at Vetiva Capital Management Limited said: “Sentiment in the first half of the month was bearish; however, things took a bullish turn after the MTN listing mid-month. The stock ended the month at a 52 percent premium to its listing price, likewise, the re-balancing of portfolios tracking the MSCI index boosted select names, predominantly banking, in the last week of the month. We expect the new month to begin on a mixed note, picking up where it left off, as sentiment surrounding the biggest catalyst we’ve seen this year, MTNN, continues to wane.”

Analysts at a Lagos based investment house, Cordros Capital said: “The Nigerian equities market recorded a positive performance last week as the benchmark index appreciated by 0.61 percent Week on Week,  W/W to settle at 31,069.37. Thus, the MtD gain increased to 6.55 percent while Yeat to Date, YtD loss moderated to 1.15percent. We reiterate our view that the blend of a compelling valuation story, together with positive macroeconomic picture leaves scope for market recovery in the medium term. However, we guide investors to tread the cautious trading path in the short term.”

In its own reaction, analysts at Afrinvest Research said: ” Following lasts week’s performance and improved investor sentiment, we anticipate a bearish performance this week in the absence of any major market catalyst.”

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