Value of Trading on NSE Rises by 49% to N78bn in June

By Goddy Egene

The value of equities trading rose by 49 per cent in June as investors staked N77.923 billion on 7.712 billion shares in 100,895 deals on the Nigerian bourse, up from N51.957 billion invested in 7.855 billion shares in 88,004 deals in May.
An analysis of the date obtained by THISDAY at the weekend showed that N11.583 billion was invested in 1.263 billion shares in the first week of June in 17,561 deals. The value fell to N7.871 billion staked on 959.917 million shares in 17, 561 deals. However, N20.394billion was staked on 2.158 billion shares in 28,072 deals in the third week. It further improved to N26.381 billion invested in 2.387 billion shares in 28,072 deals.

Market analysts attributed the improved trading in the month of June to the positive reactions to the introduction of a flexible foreign exchange rate that was introduced by the Central Bank of Nigeria (CBN) during the month under review. The policy triggered a bull run that attracted many investors who had remained on the side lines since the beginning of the year, especially foreign investors.
THISDAY recently reported that the Nigerian Stock Exchange (NSE) has facilitated the investment of N11.094 trillion in the nation’s capital market in the last 10 years with 2007, 2008, 2013 and 2014 accounted for the highest investments.

Investors traded securities worth N2.379trillion in 2007 and N2.086trillion in 2008.
Following the global financial meltdown, which also impacted the Nigerian market, the value of trading fell to N686billion in 2009. It improved to N797billion in 2010 before declining to N634billion in 2011.
The value of trading rose to N658 billion in 2012, while it jumped to N1.044trillion in 2013 and N1.388trillion in 2014.
However, it fell to N953 billion last year. Explaining the poor performance of the market in 2015, the Chief Executive Officer of the NSE, Mr. Oscar Onyema, said it was affected by factors such as political risk, currency volatility and uncertainty in global crude oil prices.

According to him, 2015 began with the continued depreciation of the naira against the dollar and uncertainty around the direction of economic policies, which fueled an already prevalent bearish sentiment in the Nigerian capital market.
“Like many emerging markets’ governments, the Federal Government of Nigeria is largely dependent on oil exports as its leading revenue source. Thus FGN revenue suffered extensively from sustained low commodities prices in the global market, as well as political and economic policy uncertainty leading up to and following the general elections held in April 2015. Sustained uncertainty in the country led to postponed decision making by business leaders in anticipation of clearer direction on economic policies, thus slowing economic activity,” he said.