RoI: NGX tasks investors on portfolio diversification

… As NGX suspends trading in 9 companies

By Nkiruka Nnorom

Investors in the Nigerian Exchange Limited (NGX) have recorded N5.64 trillion in capital appreciation in the first half of 2022 (H1’2022) on the back of improved liquidity in the system due to asset reallocation to equities from fixed income.

This is even as the NGX, Friday, suspended trading on the shares of nine companies over their failure to render the 2021 full year financial reports to the Exchange.

The companies are Mutual Benefit Assurance Plc, Coronation Insurance Plc,  Niger Insurance Plc, C&I Leasing Plc, Ekocorp Plc, Ardova Plc,  Royal Exchange Plc,  Premier Paints Plc, and African Alliance Insurance

In a notice on its website,  the NGX said: “In accordance with our default filing rules, the suspension of trading in the shares of the above mentioned companies will only be lifted upon the submission of the relevant accounts, provided the NGX Regulation Limited (NGX Regco) is satisfied that the accounts comply with all the applicable rules of the Exchange.”

Meanwhile, analysis of the trading report for the six month period to June 30, 2022, showed that the market capitalisation rose to N27.935 trillion from N22.297 trillion, translating to a N5.64 trillion gain or 25.3 per cent increase over the period.

Also, the NGX All Share Index (ASI) advanced by 21.31 per cent to 51,817.59 points from 42,716.44 points at the beginning of the year.

The positive momentum also spread to the activity level as the volume and value of shares traded rose by three per cent and 154.61 per cent to 223.11 million and N3.87 billion from 216.65 million and N1.52 billion respectively.

Sectoral performance was, however, mixed as two of the five major sectors declined, while three advanced. The oil and gas sector recorded the highest increase of 57.44 per cent, trailed by the industrial goods and the consumer goods sectors with 7.44 per cent and 5.88 per cent growth respectively.

On the flip side, the insurance and the banking sectors recorded price decline of 8.88 per cent and 1.69 per cent respectively.

Commenting on the market performance, Mr. Tajudeen Olayinka, CEO, Wyoming Capital & Partners, said the market was influenced by the negative real return in the fixed income market and the need to hedge against inflation. “Equity market is an inflation adjusting market, and so, some investors who were willing to hedge against inflation, irrespective of the downside risk that the market poses, decided to bring liquidity back to the equity market.

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