Border opening spurs stock market

As investors record N1.334trn gains


The equities market rebounded strongly last week after recording momentary losses penultimate week as a result of  the negative reaction to the uptick in short-term yields at the Nigeria Treasury Bill (NTB) primary auction with investors gaining N1.334 trillion at the end of the week’s trading.

This is even as stock dealers have said that re-opening of the land borders by the federal government would add more impetus to market recovery.

Though they believe the re-opening may not directly impact on the market, but they said that the expected positive effect on the macro economy would eventually rub off on the market.

“Federal government did not do enough impact assessment study before closing the borders. The policy harmed Nigeria more than the benefits expected.

“Re-opening the borders now will enable Nigeria come out early from current economic stagflation. Whatever impacts the economy positively is a capital market enabler,” said David Adonri, Managing Director/CEO, Highcap Securities.

Corroborating him,  Mallam Garba Kurfi, Managing Director/CEO, APT Securities and Fund, said that the earnings of many of the manufacturing companies that trade their products across the borders, whose activities were stifled in the last 15 months due to the closure, would be lifted,  thereby resulting in long term positive impact on the market as investors react to the outcome of the resumed trading on their earnings.

“The opening of the borders may not have direct impact on the stock market but indirectly, yes because many manufacturing companies have their products trade across the country,” Kurfi said.

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Meanwhile, the bulls’ return last week had led to an increase in the benchmark All Share Index (ASI)  by 7.46 percent, the largest weekly gain in five weeks to close at 36,804.75 points.

Analysis showed that foreign investors’ interest in Airtel Africa Plc (+21.0%), and bargain hunting in Dangote Cement Plc (+14.5%) and MTN Nigeria Communication Plc (+3.2%), following recent selloffs, were the primary drivers of the strong performance.

Accordingly, the Month-to-Date (M/D) and Year-to-Date (Y/D) returns increased to 5.03 percent and 37.12 percent, respectively.

in the same vein, the equities market capitalisation rose by 7.46 percent to N19.236 trillion,  indicating N1.334 trillion gains to the investors.

Also,  performance across sectors was positive with the insurance sector rising by  13.4 percent to  top the gainers list.

The industrial goods sector followed,  advancing by 7.7 percent, while the banking, consumer goods, and oil and gas sectors appreciated by 5.1 percent, 3.1 percent and 1.3 percent respectively.

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