NGX : Investors gain N641bn in November as low returns in fixed income persists
NGX : Investors gain N641bn in November as low returns in fixed income persists
Equity investors recorded N641 billion gains at the end of the November trading period yesterday, as sentiment shifted to equities following low returns in the Fixed Income (FI) market segment.
Analysis of trading statistics for the month shows that the market capitalisation of listed equities rose to N22.579 trillion from N21.938 trillion at the beginning of the month, indicating a 2.9 per cent increase.
Similarly, the All Share Index (ASI) of the Nigerian Exchange Group (NGX) advanced by 2.9 per cent to settle at 43,270.94 points from 42,038.60 points.
Recall that the interest rate on one year Treasury Bills (TBs) now stands at 5.8 per cent, which is far below inflation at 15.99 per cent during the month.
Mallam Garba Kurfi, Managing Director/CEO, APT Securities and Fund, noted that the upward movement in November was due to the positive price movement in big cap stocks, including Airtel Africa Plc, MTN Communication Nigeria Plc and Dangote Cement Plc.
He also explained that the monetary policy decision of the Central Bank of Nigeria (CBN) that kept all rates unchanged at the last Monetary Policy Committee, MPC, meeting discouraged investment into Fixed Income (FI) and deposit into banks because of negative returns when compared to inflation rate.
He stated: “We have many good stocks that yielded more than 20 per cent returns during the month. FBN Holdings, for instance, has recorded more than 60 per cent returns in the last three months. MTN, Dangote Cement, Airtel Africa, Vitafoam, Guinness Nigeria Plc and Nigerian Breweries Plc have recorded more than 25 per cent returns within the year, while Honeywell Flourmills Plc has achieved more than 200 per cent return among others.”
Kurfi posited that the trend is likely going to be sustained to the end of the year.
Meanwhile, sectoral analysis showed a mixed performance with three of the sectors declining, while two advanced. The insurance and the industrial goods sector were up 2.6 per cent and 0.7 per cent respectively, while oil & gas, banking and the consumer goods sectors declined by 7.2 per cent, 5.02 per cent and 3.72 per cent respectively.
