The Nigerian Capital Market riding on the back of market making process which commenced at the tail end of the third quarter closed in an upward trend at the last trading day of September 28.
Since the resumption of Mr. Oscar Onyema as the new Chief Executive Officer of the Nigerian Stock Exchange (NSE) last year April, the nation’s bourse has continued to experience several reformation agenda in order to restore investors’ confidence and improve the current low market capitalisation.
One of such agenda was the decision of the NSE to review its Listings Rules for companies, to accommodate international standards. And in February this year, the Securities and Exchange Commission, (SEC) capital market regulator, approved the amendments proposed by the NSE to its Listing Rules as part of its new initiatives to achieve targeted goals.
However, the NSE in April announced the names of 10 market makers, as part of efforts to bring back liquidity and depth into the embattled market.
Onyeama said the move, which was approved by the SEC, “is a great milestone and a major step in the direction of turning the market round to have liquidity and depth back into the market. We will continue to move forward on this”.
The market makers which commenced operation at the end of third quarter required to quote a buy and a sell price for each of the securities in which they make market. They are also obligated to buy and sell any particular financial asset at their displayed bid/offer rates.
Though the market has witnessed fluctuation during the Q3 due to the activities of speculators, the last trading day witnessed a huge leap in the index to end the week with a gain of 0.53 per cent. In all, the market ended September with growth of 25.5 per cent year-to-date.
An analysis of trading report made available by Nigerian Stock Exchange (NSE) showed that some of the market indicators closed firmer led by the twin market gauge, the All-Share Index (ASI) and the market capitalisation.
The ASI advanced by 137.93 points (0.53 per cent) to close at 26,011.64 points while the market capitalisation of the listed equities rose by the same margin or N43.916 billion to close at N8.282 trillion.
Similarly, the NSE 30, the NSE Insurance, and NSE-Lotus II went up by 0.44 per cent; 0.57 per cent; and 3.47 per cent respectively. However, the NSE Consumer Goods, the NSE Banking and the NSE Oil/Gas declined by 11.35 per cent; 0.92 per cent and 7.16 per cent respectively.
The stock market recorded a turnover of 1.704 billion shares worth N14.539 billion in 24,202 deals last week, in contrast to a total of 2.695 billion shares valued at N15.701 billion exchanged hands the previous week in 24,717 deals. The Financial Services sector which was the most active (measured by turnover volume) accounted for 1.177 billion shares valued at N9.218 billion traded in 13,236 deals. The Industrial Goods Sector followed with 124.658 million shares valued at N949.613 billion traded in 1,754 deals.
Activities on the banking and pharmaceuticals stocks dominated equities trading during the week. Trading in the shares from the two subsectors led by Zenith Bank Plc, First Bank of Nigeria Plc and Fidson Healthcare Plc pushed up value and volume of transactions by 27.02 per cent and 39.53 per cent respectively.
Also traded during the week were 2,200 units of NewGold Exchange Traded Funds (ETFs) valued at N5.946 million exchanged hands in seven deals in contrast to a total of 4,700 units valued at N12.770 million transacted last week in 10 deals.
Speaking to Leadership on the activities of the market in the third quarter, the Managing Director Crane? Securities Limited, Mr. Mike OkparaEze said the market making process acted as a tonic as the market became vibrant and bullish following position investors take on different stocks particularly the banking sector.
He noted that most banks posted excellent results which consequently lead to a quantum leap on their share prices and help to lift other sectors in the market. “Some of the banks paid interim dividends as a result of their good performance. GTB, Access Bank are good examples.?
Union Bank that has been posting negative in the last couple of years posted a Q3 result that is excellent as a result their price move from N4.50 to N9.23. This was an excellent trend that is believed to continue in the Q4 which will invariably transmit into a favorable result for the market. And this will lead to payment of good dividend, bonus and high capital appreciation,” Eze said.