Friday, June 07, 2013 5:43 PM / The Analyst
Recently, market data emanating from the Nigerian bourse revealed that the Nigerian capital Market continues to record improved market sentiments with renewed commitments from active investors; both local and foreign. Further information sought to show the split between domestic and foreign investors; making the case that the domestic investors were back, not the retail investors.
As it stands today, the market capitalization (MKTCAP) pre-trading today is trading within the peak range recorded in 2008 (12.62trillion at June 5th 2013 with a 182.40% growth); indicating a significant improvement from its lowest/crash point of 4.47trillion recorded in 26-Mar-09. The market CAP is just -0.28% below its peak recorded in 2008 – showing, in the absence of a single-factor driver, healthy commitments level from investors.
Recently, market data emanating from the Nigerian bourse revealed that the Nigerian capital Market continues to record improved market sentiments with renewed commitments from active investors; both local and foreign. Further information sought to show the split between domestic and foreign investors; making the case that the domestic investors were back, not the retail investors.
As it stands today, the market capitalization (MKTCAP) pre-trading today is trading within the peak range recorded in 2008 (12.62trillion at June 5th 2013 with a 182.40% growth); indicating a significant improvement from its lowest/crash point of 4.47trillion recorded in 26-Mar-09. The market CAP is just -0.28% below its peak recorded in 2008 – showing, in the absence of a single-factor driver, healthy commitments level from investors.
However, this does not suggest that market has completely erased the loss of N8.17trillion of investors money experienced during the market crash of 2008 and 2009; as the All Share Index indicates market still trades below its 2008 peak by -40.47%.
The buzz on customs street is related to the explanation for the uptick in ASI on account of two or four stocks with or without low volumes, rather about the larger issue of the impact of reversing the cycle of negativity by injecting more positive news into the market, demonstrating competence and riding the momentum from the activities of foreign and institutional investors in the market. All this has enabled the growth with +99.51% upward movement in value from its crash point in 2009.
The buzz on customs street is related to the explanation for the uptick in ASI on account of two or four stocks with or without low volumes, rather about the larger issue of the impact of reversing the cycle of negativity by injecting more positive news into the market, demonstrating competence and riding the momentum from the activities of foreign and institutional investors in the market. All this has enabled the growth with +99.51% upward movement in value from its crash point in 2009.
Further analysis also reveals renewed and strong commitments from investors - majorly the foreign investors, and their attitude towards investment in equities despite series of delisting witnessed on the bourse in the recent past.
Possible Outlook in the Short Term
The outlook in the short term appears to carry with it an increased chance of a bumpy and speculative trading environment as the profit-taking propensity gathers momentum; mainly riding on the back of prices that have rallied considerably.
Expectedly, the small-capped stocks are likely to be the worst hit, as investors in this band/range usually speculate with this category of security. Be that as it may, we expect that blue chip stocks would continue to receive/record impressive patronage from the increasing pool of value investors. The improved financial postures, along with equally impressive earnings reports should continue to stoke investors' loyalty.
Noteworthy however must be the fact that the problem of marketability still affects these class of equities due to its low float position in the market; even as the much vaunted and expectation pushing market-making operation(s) appears to be wearing the market thin as to its ability to solve the liquidity conundrum in the market, as envisaged.
Conclusively, we expect Q2’13 to close with an uptick/gains in key stocks as investors continue to pursue the path of value; targeting high capitalised stocks whose prices have surged to new highs with added and growing patronage. This, in our opinion will continue to cushion the effect of huge sell pressure that may hit market soon as profit-taking kicks in.
For further information, kindly contact analyst@proshareng.com
The outlook in the short term appears to carry with it an increased chance of a bumpy and speculative trading environment as the profit-taking propensity gathers momentum; mainly riding on the back of prices that have rallied considerably.
Expectedly, the small-capped stocks are likely to be the worst hit, as investors in this band/range usually speculate with this category of security. Be that as it may, we expect that blue chip stocks would continue to receive/record impressive patronage from the increasing pool of value investors. The improved financial postures, along with equally impressive earnings reports should continue to stoke investors' loyalty.
Noteworthy however must be the fact that the problem of marketability still affects these class of equities due to its low float position in the market; even as the much vaunted and expectation pushing market-making operation(s) appears to be wearing the market thin as to its ability to solve the liquidity conundrum in the market, as envisaged.
Conclusively, we expect Q2’13 to close with an uptick/gains in key stocks as investors continue to pursue the path of value; targeting high capitalised stocks whose prices have surged to new highs with added and growing patronage. This, in our opinion will continue to cushion the effect of huge sell pressure that may hit market soon as profit-taking kicks in.
For further information, kindly contact analyst@proshareng.com
Source:proshareng
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