STOCK MARKET RECORDS 26% GROWTH IN Q1

The market capitalisation of the Nigerian Stock Exchange recorded a growth of 26 per cent in the first quarter of the year, just as the All-share Index rose by 25 per cent in the period under review.

Specifically, the market capitalisation, which opened for the year, at N4.99tn, rose by 26 per cent, according to a report by Sterling Capital Markets Limited, to close at N6.28tn on March 31, 2010, up by N1.29tn.

Also, the ASI which measures the movement of share prices rose by 25 per cent, from 20,827.17 points at which it opened for the year, to close at 25,966.25 points at the end of March.

According to the research group of FSDH Securities, the FSDH 20 Nigeria Equity Growth closed the quarter at 261.82 points, up from the 203.09 points at which it opened for the year, indicating an increase of 28.92 per cent, while the FSDH 40 Nigeria equity Value closed at 279.90 points, up from 218.87points at which it opened for the year, rising by 27.88 per cent.

The FSDH Banking Index closed at 299.13 points, up by 29.42 per cent, from 321.14 points at which it opened for the year, but the FSDH Insurance Index closed lower at 107.39 points, down by 1.98 per cent, from 107.39.

Also, the FSDH Manufacturing and Allied Index closed at 284.04 points, up by 223.52 points at which it opened for the year, up by 27.08 per cent, while the FSDH Petroleum Index rose by 16.30 per cent, from 251.61 points to close at 292.61 points.

According to some analysts, the growth in the ASI and the market capitalisation of the NSE in the first quarter was due to appreciation in the share prices of blue chip companies; unattractive rates in the money market; and expectations of the passage of the Asset Management Company bill, which is expected to enhance the liquidity in the economy, by wiping off the toxic asset of banks.

Commenting on the performance of the stock market in the first quarter, the Managing Director of Partnership Investments, Mr. Victor Ogiemwonyi, said, 'The run of stock prices in the first quarter is good news for investors who thought the market will never recover. The impressive recovery of over 25 per cent run up this last three months, is powered by several positive factors. Positive reception of the Asset management Company proposed by the Central Bank of Nigeria, low interest rate regime and saturation of investments in the bond market, which has significantly reduced yields.

'This has forced investors to look at equities and the stock market. The lack of outlet for the huge cash injection into the economy with the disbursement of excess reserves is another factor. There is also positive news on oil prices, which naturally benefits the Nigerian economy.''

To the Managing Director of Signet Investment Limited, Mr. Dipo Aina, investors have renewed interest in the stock market and there was no more negative pronouncements from the regulators of the markets, while the earnings reports of companies were positive and in most cases surpassed the forecasts of some companies.