Nigeria Content Online

The weak trading performances witnessed
at the Nigerian Stock Exchange (NSE) during the third quarter of the
year are expected to continue during the last quarter, some finance
experts have said.

Meanwhile, the NSE market
capitalisation closed on Monday at N6.194 trillion after opening the
day at N6.145 trillion, reflecting 0.79 percent upturn or over N49
billion gains.

Olugbenga Emmanuel, a finance analyst
at WealthZone Company, a portfolio management company, said the poor
financial results posted by “many quoted companies will not boost
investors’ confidence” in the last quarter; thus, “the expectation of a
weakened market sentiments.”

Mr. Emmanuel said, “Assuming we saw
positive results in the third quarter, investors’ patronage in the
market will be high during the fourth quarter.”

This is because more investment managers will want to take advantage of the opportunities, he said.

The equity research team at Investment
Option, a business advisory company, said shares selloffs, which
usually characterise trading activities during the last quarter of the
year because of festive season, are also expected to contribute to the
projected mix trading performances.

Political news

In his own view,
Bismarck Rewane, managing director of Financial Derivatives Company
Limited, a business consultancy firm, said political news will cause
“increased uncertainty in the market” during the last quarter.

Mr. Rewane, in a
‘Monthly Economic’ report for October, said the erosion of the naira in
the foreign exchange market will further make equities cheaper.

He said the recent
sanctioning of some quoted companies has also led to the “continued
lack of investors’ confidence in equity market.” He said investors are
presently in search of alternatives to equities. For example, he said
investors are turning to the fixed income market.

However, he said if
AMCON starts operations during the period in view, the nation’s capital
market should recover, adding that “announcement of the preferred
bidders of rescued banks” could boosts investors’ confidence.

Mr. Rewane sees the
possibility of the NSE market capitalisation, during the quarter,
hitting N7.1trillion from its current N6.1 trillion region.

Third quarter trading

In the third
quarter of the year, spanning July to September, the stock market
recorded transaction volume of 17.74 billion, valued at N153 billion in
394,180 deals.

This was a decline
if compared with the second quarter when the market recorded
transaction volume of 27.95 billion, valued at N245.2 billion in
559,532 deals.

The Exchange’s information department acknowledged that “market performance was unimpressive during the third quarter.”

During the third
quarter, the banking subsector was the most active, measured by
turnover volume, with traded volume of 9.8 billion shares, valued at
N78.1 billion, and exchanged in 210,134 deals.

The insurance
subsector was second with traded volume of 2.2 billion shares, valued
at N2.23 billion, and exchanged in 16,521 deals; while the
conglomerates subsector was third, with transaction volume of 984.33
million, valued at N9.11 billion, and traded in 14,953 deals.