Nigerian bourse most laggard among Africa’s major Exchanges


The performance of the Nigerian stock market year-to-date (YtD) is worst than three other major African stock markets.

The other Africa stock markets whose performances were tracked by BusinessDay , are the Ghana Stock Exchange (GSE), Johannesburg Stock Exchange (JSE) and Nairobi Securities Exchange Limited.

The NSE All Share Index which tracks the performance of equities listed on the Nigerian Stock Exchange is in negative territory and has declined by 19.6% YtD this year to 33,228.29 points.

GSE Composite Index which shows the performance of all ordinary shares listed on the Ghana Stock Exchange (GSE) has risen by 8.38% YtD to 2,300.11 points.

Index performance for Ftse/Jse Africa All Share Index (JALSH) which tracks listed companies on the Johannesburg Stock Exchange (JSE) has risen by 10.43% YtD to 49,506.59 points.

Year-to-date, the Nairobi Securities Exchange Limited (NSE) All Share Index (NSEASI) is up by 25.70% to 166.50 points.

Falling oil prices which put pressure on the naira; and investor concerns over heightening political risks, helped to fuel the over N2.409trillion loss in the value of Nigerian equities.

The value of listed equities on the Nigerian bourse has declined from a record high of N13.379trillion, as at January 8, 2014 to N10.970trillion at close of transactions last Friday, December 5, 2014.

“At current valuation of Nigerian equities market, we see less downside risk; albeit broad macro risks will defy a recovery in the election cycle,” said market analysts at Lagos-based Associated Discount House Limited.

In a similar view, market analysts at UBA Capital plc said they expect the bearish mood to be sustained, “as caution and macro concerns continue to shape investment decisions.

“Looking at technical indicator, the Relative Strength Index (RSI) is currently in the oversold region, and therefore portends opportunities for bargain hunting in sessions ahead,” the analysts added.

Prior to the negative impact of declining oil prices to the naira exchange rate, corporate earnings in the immediate past quarter were unimpressive and refused to lift stock prices.

“Nigeria’s greater woes can be traced to the correlated declines in the crude oil price and the naira exchange rate. The impact is felt in different ways on the listed banks and consumer goods companies, let alone the small oil and gas segment of the market”, said research analysts at Lagos-based FBN Capital.

Accordingly, the analysts noted that reforms on the Nigerian Stock Exchange, such as the launch of securities lending, the development of seamless market-making and another review of the fee structure would all be helpful.

Source : BusinessDay

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