Following the
extension of trading period at the Nigerian Stock Exchange (NSE) last
December from two and half hours to four and half hours, trading
analysis showed that some sectors of the NSE have improved
significantly in their performance.
The NSE is the
second most capitalised market in Africa after Johannesburg Stock
Exchange, which is open for five hours, and the third place Cairo Stock
Exchange; opens for five and half hours in comparison.
A market assessment
carried out recently by analysts at Proshare Nigeria Limited, an
investment advisory firm, revealed that more sectors of quoted equities
at the Exchange witnessed growth in value. The figures traded in the
following sectors, last Thursday, when compared with the average
figures recorded prior to extended trading hours on December 6th showed
that Automobile Tyre sector had 937.59 per cent value growth,
Packaging sector 604.90 per cent, Construction 566.02 per cent,
Commercial Services 199.69 per cent and Maritime sector 195.26 per cent
value growth. Other sectors that witnessed significant growth include
the Foreign Listings, Engineering Technology, Breweries,
Food/Beverages, and Mortgage.
Wole Tokede, the
Exchange’s spokesperson, last Thursday, said the extension “has
continued to yield positive results as the market has continued to
record improvement in volume, value and the number of deals.”
The Interim
Administrator of the NSE, Emmanuel Ikazoboh, had also said the
extension “was a strategic move to reposition the market for enhanced
competitiveness which would give foreign investors, especially those in
the United States of America opportunity to participate in the Nigerian
market.” Available data for the two months preceding the extension of
the trading hours with the two months of the extension shows that the
volume of shares traded recorded a growth of 31.93 per cent. The market
recorded 13.892 billion shares in the two months preceding the
extension while the volume of shares transacted in the two months after
the extension rose to 18.328 billion units.
The market value
also recorded a growth of 16.81 per cent in the review period. As
against the value of N147.142 billion recorded in the two month prior
to the extension, shares value now stand at N171.875 billion in the two
months after the extension. The Exchange also recorded growth in the
number of deals in the review period. A total of 171.875 billion deals
were executed in the two months of extension compared to a total of
147.142 billion deals executed in the two months before the extension.
This represents a growth of 16.81 per cent.
Indigenous investors
Meanwhile, some
operators at the nation’s capital market said that while the Exchange
management is focusing on attracting more foreign investors through
trading hour extension, it should place more priority at protecting
indigenous investors.
Tunde
Oladapo-Dixon, chief executive officer, StockPicks Consulting, a
stockbroking firm, said, “Although it is good for the NSE to woo
foreign investors to the market for some capital projects, the main
focus for capital market authority should be to encourage indigenous
investors who will not take their funds out of the market in a long
time because the market actually is a long time investment.” Mr.
Oladapo-Dixon said more priority should be given to local investors
because “it was these same foreign investors that left our market to
crash when they pulled out their funds aftermath the financial crisis
in their countries.” He said local investors want their confidence
guarded jealously in the market.
Analysts at Asset and Resource Management Company, a fund
management firm, said for the nation’s capital market to reach its full
potential, “regulators must constantly focus on promoting a system that
instils confidence by continuously adapting existing or formulating new
rules to promote market discipline.”
