NSE: EQUITIES VALUE RISES BY N2.92TN IN 11 MONTHS

New listings and marginal growth in the share prices of some companies in the banking and conglomerates subsectors resulted in an increase in the total value of the stocks listed in the equities sector of the Nigerian stock Exchange in the first 11 months of the year.

Specifically, the market capitalisation of the listed equities, which measures the value of all the companies in the equities sector of the NSE, rose by N2.92tn or 58.52 per cent, from N4.99tn at the beginning of the year, to N7.91tn at the close of trading on Tuesday.

The All-Share Index of the NSE also increased by 18.9 per cent from 20,827.17 points at the beginning of the year, up by 3,937.48 points or 18.9 per cent, to close at 24,764.65.

The major increase in market capitalisation of the NSE was occasioned by the listing of the shares of Dangote Cement Plc recently, which added over 20 per cent to the total market capitalisation.

At the end of the first quarter of 2010, the market capitalisation and the ASI of the NSE, which dropped by about 34 per cent last year, gained about 34 per cent. But the indices have not been stable since the beginning of the second quarter due to profit taking by some investors.

The bulls and bears have also struggled for supremacy since the announcement of the operations of the Asset Management Corporation of Nigeria, which is expected to buy up the toxic assets of rescued banks.

In the last few weeks, the shares of some of the rescued banks rallied, on the hope of better valuations of their toxic assets by AMCON.

Going forward, some analysts who spoke with our correspondent, noted that the market indices might remain unstable until the country's election was concluded next year.

For instance, analysts at Meristem Securities, said, 'Full stability in the market depends on the ability of the country to conduct credible and hitch-free elections, because foreign investors control the bulk of investments in the country currently. It is a kind of wait and see scenario. If the elections are not properly handled, market stability could be a mirage.'

Analysts at Sterling Capital Markets Limited also said, 'The recent decision and rising interest rate is expected to impact the flow of liquidity to the capital market, but buy opportunity continue to exist for stocks with good fundamentals for long term.'

Some analysts at Afrinvest West Africa Limited also said, 'We think Nigeria's robust Gross Domestic Product's growth prospects support current valuations and opportunities in a number of stocks, based on impressive earnings.'