01 September 2015, Lagos – The equities segment of the Nigerian Stock Exchange closed higher on Monday as investors took position ahead of the appointment of ministers by President Muhammadu Buhari.
Buhari had on Thursday announced some key appointments including the Secretary to the Government of the Federation on Thursday with ministers expected to be named in September after which it is expected that there would be a clearer picture about the government’s economic policies.
This, according to analysts, led investors, who have held back from investing due to uncertainty about the economic policies of the current administration, to take positions.
Consequently, stocks rose for the third straight session on Monday, helping the market capitalisation to close N300bn or 3.02 per cent higher at N10.208tn.
The NSE All-Share Index also rose by 3.02 per cent, or 870.22 basis points, from 28,814.62 basis points to 29,684.84 basis points.
The market capitalisation of equities had plunged by N571bn or 5.57 per cent between Monday and Wednesday last week before equities rallied to halt the slide on Thursday with a 0.3 per cent or N29bn gain.
The gains were extended on Friday with the market capitalisation rising by N209bn or 2.15 per cent to close at N9.908tn.
Monday’s gains mean that last week’s losses had been virtually erased.
The Chief Executive Officer, Highcap Securities, Mr. David Adonri, said the gains were as a result of several factors, including growing confidence in global markets.
He explained that global markets were rebounding after the decline of the last two weeks, which affected the Nigerian market.
Adonri said that just as the decline affected Nigeria, the recovery and confidence had trickled down to the nation’s market.
“Secondly, you know the NSE ASI declined to a 52-week low at 28,000 basis points, we were just a little bit away from the one-year low of 27,000 points. So, it appeared that the market had come to a resistant level; and it was bound to rebound,” he added.
Adonri explained that the payment of interim dividends by Guaranty Trust Bank, Zenith Bank and Access Bank, along with some other companies, helped boost investor confidence as well.
“They gave the impression that the listed companies are doing well and there was no cause for alarm,” he said, adding that the fact the “new government has started constituting itself into an administration with recent appointments” also helped.
The CEO, Enterprise Stockbrokers, Mr. Rotimi Fakayejo, explained that the low prices of stocks also helped to attract investors back to the market.